Investors should take a long position on key commodities with substantial returns expected in 2024, according to Goldman Sachs. The investment bank expects the S & P GSCI, a commodities markets index, to deliver a 21% return over the next 12 months as the broader economic environment improves, OPEC moves to support crude prices as refining is tight and with energy and gold acting as hedges against supply shocks. Goldman recommends what it calls a 2024 deficits basket, going long on energy excluding natural gas and on industrial metals, excluding nickel and zinc. Oil sold off last week on concerns that demand is fading due to rate hikes, potentially signaling an economic slowdown. But Goldman thinks the effect of rates is fading, recession fears are receding, industrial inventory destocking is slowing and resilience in the service sector will support demand and spot prices moving forward. OPEC is also expected to keep its crude production cuts in place through most of 2024, according to Goldman. Brent should rise to an average of $92 a barrel next year, and demand for green metals such as copper and aluminum should rise more than 20% in 2024. Gold and energy also are potential hedges against supply shocks from geopolitical risks and other developments, according to Goldman. The investment bank views an interruption of trade through the Strait of Hormuz as unlikely, but if such an event did occur, the rally would be sizable and immediate. It is also gold's time to shine, the investment bank said, with prices rising 5% since the Israel-Hamas war started. The precious metal faces potential headwinds from strong U.S. economic activity, which should put pressure on gold if the Israel-Hamas war eases. But any sell-off would be limited due to a dovish Federal Reserve and would be a buying opportunity. — CNBC's Michael Bloom contributed reporting.