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What is the Goldman Sachs Commodity Index?

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  • Written By: Mary McMahon
  • Edited By: Kristen Osborne
  • Last Modified Date: 25 August 2016
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The Goldman Sachs Commodity Index is an index of long-term commodity futures traded by investors involved in the Chicago Mercantile Exchange. It is designed to provide a broad overview of the direction being taken by investments in commodity futures markets, allowing people to make informed decisions about financial activities in this sector of the market. It can also be used as a general economic indicator, as changes in the Goldman Sachs Commodity Index can reflect larger market shifts, not just trends within the commodity futures trading community.

While people still refer to this index as the Goldman Sachs Commodity Index, it was actually acquired by Standard & Poor's in 2007, and is technically known as the Standard & Poor's Goldman Sach's Commodity Index (S&P GSCI). Information on the latest numbers is readily available through publications produced by Standard & Poor's, and it can also be found in financial publications and third party aggregation sites interested in collecting information about financial trends for the benefit of people interested in investments and markets.

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This index incorporates data drawn from a number of different sectors within the commodities market. This is done to offset trends in specific industries to get a more balanced picture. An index just focusing on one commodity, like wheat, would not provide a clear image of what is happening in the larger commodities market. Using an assortment of commodities, it is possible to correct for small changes within specific sectors to give more generalized information about the market.

People can review the Goldman Sachs Commodity index for information about performance in the commodities market, including upward and downward trends, and they can also use the index to look at the market as a whole. Shifts in commodity futures trading can reveal information about investor attitudes and behaviors. Conservative investments can be indicative of concerns about falling values, for example, while a jump in investment activity suggests that investors think there is something to be excited about.

Like other indexes of activity on financial markets, the Goldman Sachs Commodity Index is regularly updated to reflect the latest activity and it is used by investors, analysts, personal finance advisors, and economists to collect information about the market. When reviewing quotes on performance, it is important to note the date and time of quotes, as the market can move rapidly and making decisions on the basis of outdated information can generate problems for investors.

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