Goldman Sachs is back buying commodities after a month and a half hiatus.
On April 11th, Goldman turned near term bearish on commodities. And three weeks later, we saw the beginning of a selloff with a 10% drop in silver as a result of CME raising margin requirements. A week later CME proceeded to raise margin requirements on Oil as well.
Commodities all turned lower at the beginning of May.
Month to Date:
Oil - down 12%
Gold - down 2.5%
Silver - down 25%
This morning, Goldman is getting back on the saddle and buying commodities cheaper. They suggest buying oil, copper, and zinc.
Goldman raised year-end Brent crude oil price forecast to $120 from $105, 12-month forecast to $130 from $107 and end 2012 forecast to $140 from $120.
They consider the current slowdown in economic growth as part of a normal mid-cycle pause and current weakness represents signs of a slowdown and not a downturn.