DBB

Goldman Sachs sees a structural bull market for commodities emerging in 2021, sparked by a weaker U.S. dollar, rising inflation risks and demand driven by additional fiscal and monetary stimulus

The amount of cash cycling through one of the world’s largest exchange-traded funds is turning heads across Wall Street.

Plenty on Wall Street fear the explosive growth of passive investing will eventually store up trouble for bond portfolios. An academic from the Swiss Finance Institute has found evidence it has already begun.

DBB has been undermined by a firmer dollar environment since September, as investors have been inclined to unwind some reflation trades like long commodities.We think that the appreciation in the dollar is a transient phenomenon. We expect US authorities to do whatever it takes to reflect their and the global economy.China has unleashed a metals-intensive stimulus to fight the COVID-19, which is very positive for base metals demand and thus prices.With the seasonality playing in favor of base metals in Q4, we think that the sell-off in DBB is already over and expect DBB to reach $18/share by the year-end.

Base metals rose 8.95% in Q3. Zinc- The leader of the nonferrous metals on the upside. All base metals post gains- Double-digit percentage increases in COMEX copper, nickel, and zinc. Iron ore rallies 25.9%. The BDI declines by 7.58%.

A traditionally weak time of the year in raw material markets. 2020 is anything but a traditional year. Keep an eye on the metals. Risk-off potentials on the election and virus- Risk-off means more bullish fuel. DBB for base metals, GLTR for precious metals on significant dips.