Goldman: Commodity bear market will continue

In a recent note, Goldman analysts say the rebound in commodity prices over the last several weeks isn’t going to hold. The investment bank believes the rally will reverse due to a stronger US dollar, cheaper oil, and an economic slowdown in China. GS is most concerned with copper, which they predict to drop 16% over the next year. Oil is also expected to drop to $45 a barrel, driven mostly by oversupply. “We believe that current prices represent a very strong selling opportunity, for producers and investors alike,” wrote Goldman in regard to copper. As copper tends to be a leading indicator of economic growth, Goldman’s prediction doesn’t necessarily bode well for the global economy. However, some pressure will be alleviated by lower oil prices. (VIEW LINK)