Goldman Sachs’s heavyweight commodities expert Jeff Currie maintained a
dour outlook for gold prices and crude futures in an interview with CNBC Wednesday. The commodities analysts said metals and oil are being hurt by what he described as three Ds: deflation, divergence and deleveraging. All of those elements he described as putting pressure on gold and oil, which was rebounding in Wednesday trade after U.S. government data showed weekly declines in supplies and production.
Still, Curried maintained a $45 a barrel target for West Texas Intermediate crude oil, saying that supplies were outstripping demand. “I think the downside risks are substantial,” Curried told CNBC.
Currie said deflation, as the dollar heads higher is lowering the cost of mining metals like gold and copper. The commodity expert said divergence in the health of the U.S. market compared to other emerging economies also is putting pressure on commodities. Finally, he said de-leveraging in emerging markets like China, which is wrestling with an intractable stock market , is hamstringing commodity prices.
There may be a chance for a bounce in commodities if the Federal Reserve, which is expected to release a policy statement at 2 p.m. Eastern Time Wednesday, signals that it may wait to raise rates, the Goldman Sachs analyst said.
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