A weaker U.S. dollar, rising inflation risks and demand driven by additional fiscal and monetary stimulus from major central banks will spur a bull market for commodities in 2021, Goldman Sachs said on Thursday. The bank forecast a return of 28% over a 12-month period on the S&P/Goldman Sachs Commodity Index (GSCI), with a 17.9% return for precious metals, 42.6% for energy, 5.5% for industrial metals and a negative return of 0.8% for agriculture. Markets are now increasingly concerned about the return of inflation, the Wall Street bank said. Expansionary fiscal and monetary policies in developed market economies continue to drive interest rates lower and create demand for hedging the tail risks of inflation, lifting demand for precious metals, Goldman Sachs said in a note. Goldman forecast gold prices XAU= at an average of $1,836 per ounce in 2020 and $2,300 per ounce in 2021, and expects silver prices XAG= to be at around $22 per ounce in 2020 and $30 per ounce next year. Spot gold was trading at $1,915.04 per ounce by 0527 GMT, while silver was at $24.85 per ounce. Gold, widely viewed as a hedge against inflation and currency debasement, has gained 26% this year, benefiting from unprecedented global stimulus and near-zero interest rates. Non-energy commodities could see an “immediate upside” as the market balances tighten ahead of expectations on strong demand from China and weather-driven risks, the Goldman Sachs analysts said. The bank maintained a “neutral” view on commodities in the near term and “overweight” in the medium term.