Goldman's commodity outlook buckles under deflation threat
Tokyo
CHEAPER energy and the US dollar's advance are darkening the outlook for commodities, according to Goldman Sachs Group Inc.
The US bank cut its forecasts for metals and mined raw materials including copper, gold and iron ore over the next three years by about 10 to 20 per cent as production costs shrink, according to a report.
Oil has led a collapse in commodities after a decade-long bull market boosted output, spurring gains in inventories. Falling prices are threatening to prolong the rout as they make it cheaper to produce more, worsening the oversupply that triggered the slump, according to Goldman.
"The primary reason for the changes to our forecasts is cost deflation," the bank's analysts including Max Layton wrote in the report, citing "actual and anticipated US dollar strength, cheaper ener…
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