Commodity prices have had a pretty lousy 2015.
A slowdown in China, which gobbled up raw materials everywhere from Australia to Chile, exacerbated a supply glut in most major commodities.
And Goldman Sachs thinks the pressure is likely to persist as it noted its underweight position in commodities for the next 12 months.
"We have been forecasting weak commodity returns since last fall, although the extent of this weakness has far exceeded our initial expectations," said the investment bank in a note on Thursday.
Supply adjustments to cut production are still insufficient and demand is lackluster , it added.
There's hope on the horizon for a recovery in the global business cycle beginning early 2016, which is likely to spur better commodity returns.
Still, growth headwinds could delay the entry to the recovery phase and there are downside risks.
"As a result, we don't believe that current prices present an appealing entry point to position for higher commodity returns, despite the perceived asymmetric risk-reward at low spot prices and post such weak returns," Goldman said, while noting that this should not derail the long-term strategic case for including commodities in asset allocation.
It is keeping its outlook for U.S. WTI crude oil at $45 a barrel and for Brent crude oil at $50 a barrel in 2016 due to oversupply. It forecasts gold to remain at $1,100 per ounce for the next three months, $1,050 an ounce for the next six months and $1,000 an ounce for the next 12 months.
Goldman Sachs also expects copper prices to fall to $4,800 a ton by end -2015 and to $4,500 a ton by end-2016. Spot iron ore prices are expected to decline to $44 a ton next year and $40 a ton in 2017 from around $46 a ton now.
WTI crude oil is now around $41 a barrel while Brent crude oil is around $44 a barrel. Three-month copper on the London Metal Exchange is around $4,616 a ton.