Commodities: Market has ‘bottomed’ out declares Goldman Sachs as oil price jumps

25th May 2011

Commodities including gold, pulled back from the biggest drop in two weeks after Goldman Sachs Group said it was  "more bullish" on raw materials as demand improves.

The Guardian reported that oil and gasoline rose 1.9% while equities dropped.

The Standard & Poor's 500 Index closed 0.1% lower at 1,316.28.

The S&P GSCI Index of commodities gained 1.2 percent, recouping about three-quarters of yesterday's 1.7 percent slump.

Morgan Stanley raised its forecast for Brent crude by 20%.

Goldman Sachs called the bottom of the commodities market – just six weeks after calling the top.

Optimism over commodity prices did not extend to commodities trader Glencore. Bloomberg reported that it shares were priced 2.8% lower in the second day of their Hong Kong stock exchange debut.

The firm's shares touched HK$64.65 ($8.31) in early trading, down from their HK$66.53 IPO price, with the stock at HK$64.75 an hour later.

Glencore shares in London sank to 525p ($8.49) by the close Tuesday, or 0.84 percent below their IPO price of 530 pence each, despite the float being among the most anticipated of the year.

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