Goldman Sachs expects a China-led commodity supercycle and capital flight from energy and investment markets this month, following concerns raised by the banking sector, the head of this sector at the US bank said.
“As the losses mounted, they spilled over into commodities,” Jeff Currie, global head of commodities at Goldman Sachs, told the Financial Times Global Commodities Summit on Tuesday.
“Historically, when you have this type of event that marks several sectors, it takes months to recover the capital. We will still have a deficit for June and it will cause oil prices to rise ”, he estimated.
Oil prices plunged to 15-month lows due to a crisis at Switzerland’s second-biggest bank, Credit Suisse, which followed the collapse of two US lenders and led to a takeover by UBS, the biggest Swiss rival.
Currie emphasized that the hit was on the supply side rather than the demand side and remains very bullish on copper. “The deposits are already gone (…) The cash goes to the money markets, not to the banks.”
“On copper, the future outlook is extraordinarily positive. We will be at the lowest observable inventories ever recorded at 125,000 tons. We have a maximum supply in 2024. In the short term, we put (the copper price) at $10,500 and in the long term, our target price is $15,000 per tonne.”
The comments echoed the opinion of copper trader Trafigura, which said the price could exceed US$12,000. This metal reached a record of US$10,845 in March 2022.
Currie added that concerns about the banking sector centered on regional banks in the US, while Europe was relatively safe from contagion.
Source: Larepublica
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