Guess who expects a recovery in commodities now? None other than Goldman Sachs.
You'll recall the investment bank, which is also Wall Street's biggest commodities trader, saying a month ago that it's bailing out of commodities after making a 25 per cent return since December.
Now, Jeffrey Currie, who heads Goldman's London-based commodities research team, says: "Given the magnitude of the pullback, it does create an opportunity for more upside potential, particularly in the second half of this year, when fundamentals are expected to tighten," according to an interview with Bloomberg News.
This after commodities lost about $99-billion (U.S.) in market value last week, according to the S&P GSCI index.The last time the index fell this much, it rebounded 12 percent the following week, Bloomberg points out.
Commodities are snapping back this morning: Gold climbed back above $1,500 an ounce, while copper rose to $8,934.50 a tonne from $8,825 a tonne on Friday, and silver, which lost 25 per cent over the course of last week, rose 3.5 per cent to $36.86 an ounce.
Oil rose by $2.57 to $99.75, after hitting an intraday high of $99.99 a barrel. Goldman Sachs said that while it was not ruling out a further fall in oil prices, crude could top its recent highs by 2012 because of tight global supplies.
U.S. stock futures appeared poised for a higher open, with Dow Jones industrial futures up 43 points, or 0.34 per cent, to 12,612.00 and S&P 500 futures up 4.7 points, or 0.35 per cent, at 1,339.70.
European stock markets were broadly lower as investors worried about Greece's inability to repay its debts. Britain's FTSE 100 was 0.3 percent lower to 5,959.40. Germany's DAX slipped 0.9 percent to 7,431.45 and France's CAC-40 lost 0.9 percent to 4,022.36.
Better-than-expected growth in U.S. jobs and a bounce back in commodity prices led to modest gains in most Asian markets. Hong Kong's Hang Seng rose 0.8 percent to 23,336, while Australia's S&P/ASX 200 added 0.3 percent to 4,756.80.
Japan's Nikkei dipped 0.7 percent to 9,794.38 on concerns over the economic impact of the March earthquake, tsunami and nuclear disaster.