Commodities are back in favour, boosting oil producers and miners after their annus horribilis of 2015. The Bloomberg Commodity Index is set for its biggest three-day advance since June, led by gains in oil and industrial metals.
That’s pushed shares of mining companies close to their highest this year, with Anglo American Plc and Glencore Plc gaining almost 5 percent on Tuesday. Energy companies also rose, with Tullow Oil Plc up 2.2 per cent.
Goldman Sachs Group Inc. said investors should bet on higher prices in the next year as manufacturing picks up around the world, the first time the bank has recommended an overweight position for the asset class in more than four years.
Purchasing managers’ indexes strengthened in all major regions in October, helping to spur gains in iron ore, copper and other base metals. Speculation that U.S. President-elect Donald Trump’s spending plans will boost demand has added strength to the advance. Trump mentioned building steel and car production capacity as one of his priorities for his first 100 days in power in a video posted online.
Goldman raised its iron ore price forecasts, citing an unexpected resilience in steel usage and a demand boost coming from broad restocking, as well as its oil price estimates into next year.
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