The bank expects the S&P GSCI Commodity Index to return 43% next year. Commodities will be the most profitable asset class in 2023, bank strategists said in their market review.
“From a fundamental perspective, the outlook for most commodities in 2023 is the best it has been since we first looked at the supercycle in October 2020,” wrote Geoffrey Curry, head of global commodity research at Goldman Sachs. According to Goldman Sachs and industry leaders, the base metals needed to transition to a new energy paradigm will also see a bull market in the coming years.
The first quarter of 2023 may be weaker than the rest of the year due to an expected slowdown in economic growth, but low investment in oil, gas and key metals will continue to support what Goldman Sachs has called a new commodities super cycle. A drop in Brent oil prices to below $80 is likely to be temporary, the Wall Street bank said, as oil market participants may be overly pessimistic about demand from China.
In addition, Goldman Sachs said in early December that copper prices would reach a new all-time high next year in an "extremely" tight market. The bank expects copper prices to rise above the current all-time high of $10,845 per tonne hit in March 2022 next year. Analysts raised their 12-month price target from $9,000 to $11,000 per ton.