Capital flight from China and energy markets and investments this month will drive a commodities supercycle after concerns about the banking sector, the head of Goldman Sachs 'commodities business predicted.
"As losses mount, they spill over into Commodities," Jeff Currie, Goldman's Global head of commodities, told the Financial Times at the Commodities Global Summit on Tuesday.
"Historically, when Cihang had this kind of black and blue incident, it took months to get the money back... It will still be in the red until June and that will drive oil higher."
Oil prices fell to 15-month lows as Switzerland's second-largest bank, Credit Suisse, was plunged into crisis following the collapse of two U.S. banks, which led to its takeover by rival UBS.
Currie stressed that the impact is on the supply side, not demand, and he remains very bullish on copper prices.
"The savings are gone... Cash is going into money markets, not banks."
"In the copper market, the forward outlook is very positive. Copper stocks will fall to 125,000 tonnes, the lowest on record, with supply peaking in 2024... In the short term we expect copper to trade at $10,500 a tonne, with a longer-term target of $15,000."
His comments echoed those of Trafigura, a large copper trader. Trafigura said copper could go as high as $12,000. It hit a record high of $10,845 in March 2022.
Currie added that concerns about the banking sector focused on regional banks in the United States, while Europe was relatively safe.
