Goldman Sachs Goes Long Commodities in Reflation Trade

The video discusses the global economic reflation and its impact on industrial metals, highlighting the role of Chinese economic policies and the business cycle in driving demand. It examines the dynamics of supply and demand, market repricing, and forward curves, predicting returns for various commodities. The outlook for gold is analyzed in the context of economic stimulus and rate hikes, while backwardation and dollar dynamics are explored for their influence on commodity returns.

What is one reason Jeff Curry believes the rally in industrial metals is driven by fundamentals?

• The decrease in global demand for metals

• The increase in global oil prices

• The devaluation of the RMB and capital controls in China

• The rise in US interest rates

What typically signals a buy opportunity for commodities according to the business cycle?

• A decrease in global demand

• A positive output gap and demand exceeding supply

• An increase in the output gap

• A decrease in global supply

What does backwardation in the forward curve indicate?

• A stable market with no expected changes

• The market is starting to price in future demand

• An increase in supply over demand

• A decrease in commodity prices

How does the potential Trump fiscal stimulus affect the economic environment?

• It results in a stronger euro

• It leads to a decrease in commodity prices

• It creates a tailwind for an already strong economic environment

• It causes a reduction in global demand

Why is zinc considered a favored commodity for 2017?

• It has the tightest fundamentals with high demand and low supply

• It is not affected by global demand

• It is the least volatile commodity

• It has the highest supply levels

What is the expected impact of a stronger cyclical backdrop on gold?

• It has no impact on gold

• It stabilizes gold prices

• It increases the demand for gold

• It leads to a bearish outlook for gold

What is the relationship between the dollar and commodity returns according to the transcript?

• They always move together

• They are directly proportional

• There is no correlation between them

• They always move inversely