The end of quantitative easing, or so-called quantitative easing (QE), the U.S. will have a negative impact on gold, but demand for oil and industrial metals will continue to support if there is real economic growth, said Jeff Currie of Goldman Sachs.
"Gold is likely to directly reflect what is happening with QE, and we might see a big setback," said Currie, who heads commodities research at the investment bank.
Speaking at a Platts oil conference on Friday, Currie said the precious metal has been running behind quantitative easing, which has reduced the value of paper money.
Oil and industrial metals, on the other hand, has increased due to fears of supply shortages. If real, sustainable economic growth has been generated from the QE process, there may be some slowing of growth, but still can support the demand for industrial commodities, he said.
"We think at least 12 months away before we see some physical problems began to emerge again, that's why we argue for a correction in the near future," said Currie.
"But if the economy were to survive together, we believe oil will begin to look like agricultural products, with real physical shortages and higher prices."
Currie said agricultural commodity is in critical shortage, but the oil will not get to this stage until 2012.
"The market has grown much beyond market demand that has been developed for copper, and you'll see the same dynamics play in the oil commodities during the next decade," he said.
"end game should be a policy response, because we're dealing with a situation where there are political constraints on the free flow of investment", lid
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