daytrading july 23 afternoon, page-28

Goldman Sachs haspared its 12-month commodity return forecast to almost flat after oil rallied, sticking with a neutral recommendation on raw materials while predicting losses for gold and gains for base metals.

The Standard & Poor’s GSCI Enhanced Commodity Index will return 0.1 per cent over the period, the New York-based bank said in a report dated yesterday. That compares with a forecast gain of 2.3 per cent over 12 months in a report on June 12.

The so-called strategic case for holding commodities remains strong, partly because raw materials are a hedge against geopolitical risks, analysts led by Jeffrey Currie wrote in the report.

‘‘Our current outlook is extremely benign with returns expected to be mostly flat over the next 12 months,’’ the Goldman analysts wrote.

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The Aussie dollar is one of the risks looming for the Aussie which comes in the form of the June quarter CPI reading, due at 11.30am tomorrow.

‘‘The risk for the market tomorrow is more skewed towards a stronger-than-expected inflation outcome,’’ Zoe McHugh, an interest-rate strategist at ANZ, wrote in a note to clients.

‘‘We think the market has moved too low now and recommend buying 10-year inflation on any dip back towards 2.35 per cent, given the potential for the market to move back towards 2.50/2.60 per cent.’’

Traders see a 77 per cent chance RBA policy makers will lower the central bank’s benchmark rate by 25 basis points to 2.5 per cent at their next meeting on August 6, according to interest-rate swaps data compiled by Bloomberg.