Morgan Stanley Tepid on Commodities For 2012; Sees Gold at $2,200/oz

Gains in commodities prices will be limited next year due to a rising U.S. dollar and slowing global economy, Morgan Stanley forecast today. Europe's sovereign debt crisis and the resulting austerity measures will also impact commodities prices next year, the bank said. Commodities had their worst quarter since 2008 in the three months to Sept. 30 on concern that Europe's debt crisis was spreading, while 18 of 24 commodities tracked by the Standard & Poor's GSCI Index dropped in November, Bloomberg reported. Morgan Stanley said gold is its top commodities pick for 2012 and sees the yellow metal averaging $2,200 an ounce next year. Due to supply and demand issues, the bank also likes corn, soybeans and cattle. Goldman Sachs has a neutral rating on commodities over the next three to six months and an overweight recommendation over 12 months, according to Bloomberg. The bank sees global growth as sufficient to move commodities prices higher.