Quick Bites | We remain bullish on commodities

Goldman Sachs came out with a neat summary of the case for remaining bullish on commodities, which it calls “The 5D Bull Market”. What are the 5Ds?

  1. Disinvestment: low investment in commodities creates supply tightness.
  2. Decarbonisation and climate change: require higher prices to attract green capital expenditure.
  3. De-risking (hedging): geopolitical de-risking and strategic restocking support the demand for gold and critical commodities.
  4. Datacentres and artificial intelligence: support demand via power and higher incomes.
  5. Defence spending: support demand for metals and fuels.

Source: Goldman Sachs

We have had similar thoughts for some time and have frequently written about our views. We remain selectively bullish on commodities because demand growth remains solid, supply remains structurally constrained, and we see more upside in industrial metals and gold.