Feb 21 (Reuters) - Copper and ** are expected to see the biggest direct in the commodities space as the Federal Reserve is likely to cut interest rates, analysts at Goldman Sachs said
"The Fed pushed the U.S. two-year rate down by 100 basis points, with the largest direct boost to metals**, particularly copper (6%), then** (3%), followed by oil (3%)," Goldman Sachs said. Sachs said in a Feb. 20 report.
As of 0542 GMT on Wednesday, three-month copper on the London Metal Exchange** was trading near a three-week high of $8,548 a tonne, while spot*** was near a two-week high of $2,030 an ounce$30.
However, Wall Street banks said they do not expect a significant impact on natural gas or agricultural products** as micro factors such as seasonal inventory cycles and weather outweigh the impact of rate cuts.
Goldman Sachs said: "The positive impact of lower interest rates on commodity demand and** makes the impact of commodities** theoretically obscured. ”
In fact, we find that lower inventory costs and GDP growth due to loose financial conditions have driven up demand**. ”
The vast majority of economists polled by Reuters said they expect the Fed to cut its federal ** interest rate in June, adding that the bigger risk is that the first rate cut will be later than expected.