GOLDMAN SACHS COMMODITY INDEX

When all the commodities experience sharp sell-off, this is reflected on the major commodity indices. One of the widely used commodity index is the Goldman Sachs Commodity Index. The weight of energy products in the index is higher when compared with the Reuters/Jefferies CRB Index. As a result changes in Crude Oil price has a larger impact on the technical outlook for the GSCI. Yes, we have seen agricultural commodities and industrial metals weakening in the past few months but Light Crude Oil’s sharp correction in the past few days brought GSCI clearly below its 200 day moving average. Lower lows and lower highs define the medium-term downtrend and before Goldman Sachs Commodity Index moves back above 650-670 area stay bearish on commodities.