Commodities will be the best-performing asset class once again in 2023, handing investors returns of more than 40%, according to Goldman Sachs Group.

The Wall Street bank said that while the first quarter may be “bumpy” due to economic weakness in the US and China, scarcities of raw materials from oil to natural gas and metals will boost prices after that.

Goldman predicted a multi-year commodities supercycle in late 2020. It has stuck to that view even as energy prices dipped in recent months due to China’s strict coronavirus lockdowns and a global economic slowdown suppressing demand.

“Despite a near doubling year-on-year of many commodity prices by May 2022, capex across the entire commodity complex disappointed,” Goldman analysts including Jeff Currie and Samantha Dart wrote in a note on December 14. “This is the single most important revelation of 2022 – even the extraordinarily high prices seen earlier this year cannot create sufficient capital inflows and hence supply response to solve long-term shortages.”

The bank expects the S&P GSCI Total Return Index — a leading measure of commodity-price movements — to rise 43% in 2023. That would add to gains of 40% so far this year.

Goldman’s far from alone among analysts and investors in being bullish on commodities. Many say a lack of exploration for new oil fields and investment in mines has led to dwindling stockpiles and tight markets. The top 15 commodity-focused hedge funds have increased their assets by 50% this year to $20.7 billion, according to preliminary data from Bridge Alternative Investments.

“Without sufficient capex to create spare supply capacity, commodities will remain stuck in a state of long-run shortages, with higher and more volatile prices,” Goldman’s analysts said.

The bank forecasts that Brent crude will climb to $105 a barrel in the final quarter of 2023, up from $82 today. It sees copper jumping to $10 050 a ton from around $8 400, and Asian benchmark liquefied natural gas rising from $33 per million British thermal units to $53.10.

Still, some rival analysts are skeptical, saying the global economy is too weak to lead to more price gains for commodities.

“The tide could be turning,” Citigroup Inc. analysts, led by Ed Morse, said this month. “The possibility of a global recession poses a threat to an asset class that has experienced a renaissance over the past two years.”