GOLD UPDATES 12.06.2012:- LONDON: Goldman Sachs Group predicted a 29% return over the next year from the Standard & Poor's GSCI Enhanced Commodity Index, led by energy and industrial-metals investments.
European policymakers will be able to contain the euro-area debt crisis, while recovery in the US and China is set to continue, Jeffrey Currie, head of commodities research in New York, said on Monday in a report.
Returns may be 41% in a year for energy investments, compared with 23% for industrial metals and 18% for precious metals, while agriculture is forecast to lose 14%, the report showed.
"Although the macroeconomic backdrop still remains uncertain, particularly in Europe, we believe that the selloff in commodity prices is likely overdone and the price risks are shifting more to the upside," Currie wrote in the report.
Commodities as measured by the S&P GSCI Enhanced Commodity Index dropped 13% in May and are down 9.1% this year on mounting concern that Europe's widening debt crisis will derail global growth and curb demand for commodities. Coffee, natural gas, cotton and crude oil paced declines.
Goldman Sachs cut its three-month outlook on commodities to neutral from overweight on March 28, while sticking with an overweight recommendation for a one-year period. Commodities may return 13% in a year, the bank said in April. (NEAL BHAI 9999974733)
