Salient to Investors:

Jeffrey Currie et al at Goldman Sachs said:

  • They cut their 12-month commodity return forecast for the S&P GSCI Enhanced Commodity Index to 0.1 percent, maintained a neutral recommendation on raw materials, while precious metals and agricultural commodities may drop 8 percent and base metals will gain 6 percent.
  • Gold may decline to $1,050 at the end of 2014.
  • Corn will decline in half2 2013 as increased US acreage boosts output, bolstering reserves, and their 12-month estimate is $4.75 a bushel.
  • The strategic case for holding commodities remains strong, partly because raw materials are a hedge against geopolitical risks.

UBS says slow US economic growth will boost equities more than raw materials,  is bearish on gold, and rates commodities as underweight.

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