Goldman Sachs Says You Must Own Commodities in These Tense Times – by Pratish Narayanan (Bloomberg News – April 13, 2018)

The case for owning commodities has rarely been stronger, according to Goldman Sachs Group Inc. With raw materials rallying on escalating political tensions across the globe and economic growth remaining strong, the bank’s analysts including Jeffrey Currie doubled down on their “overweight” recommendation.

They reiterated a view that commodities will yield returns of 10 percent over the next 12 months, according to an April 12 note.

The Bloomberg Commodity Index is up more than 2.5 percent this week, the most in two months. Another raw materials gauge, the S&P GSCI Index, has rallied over 5 percent this week to levels last seen in 2014.

The gains are being driven by crude, which is set for its best weekly jump since July, and aluminum, poised for its strongest rally since 1987.

Oil investors are rattled by the potential for Middle East supply disruptions in the wake of the U.S. threatening to bomb Russian ally Syria, Saudi Arabia shooting down missiles fired by rebels in Yemen, and rising concern that America would reimpose sanctions on Iran and curb its exports.

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