PremiumGoldman Makes The Case For Commodities As A Macro Tail Hedge
Goldman Sachs Research recently published two notes which make the case for commodities in a macro portfolio, taking into account key themes which are top of mind in today’s macro environment:
“Equity-bond portfolios are not well diversified in two stagflationary regimes.
The first regime is when US institutional credibility erodes, as in the 1970s, and gold protects against unanchored inflation.
The second regime is when supply shocks drive both weaker growth and higher prices, as in 2022 when Russia, then supplying ~40% of Europe's gas, cut flows, and commodities – as the disrupted input – were among the few assets with positive real returns.
Gold has recently regained attention amid concerns about Fed independence, but diversification into broad commodities may be just as relevant as commodity supply becomes more concentrated and is increasingly wielded as leverage”