Goldman Sachs Commodity Index (GSCI)

Written by:
Image
Paul Tracy

Paul has been a respected figure in the financial markets for more than two decades.

Prior to starting InvestingAnswers, Paul founded and managed one of the most influential investment research firms in America, with more than 2 million monthly readers. While there, Paul authored and edited thousands of financial research briefs, was published on Nasdaq. com, Yahoo Finance, and dozens of other prominent media outlets, and appeared as a guest expert at prominent radio shows and i...

View all posts
Updated January 16, 2021

What is the Goldman Sachs Commodity Index (GSCI)?

The Goldman Sachs Commodity Index (GSCI) is a commodities index now owned by Standard & Poor's.

How Does the Goldman Sachs Commodity Index (GSCI) Work?

S&P acquired the index from Goldman Sachs on February 2, 2007 and renamed it the S&P GSCI.

All of the commodities in the GSCI are physical commodities; no financial commodities are allowed. These commodities include items such as wheat, corn, soybeans, coffee, sugar, cocoa, hogs, cotton, cattle, oil, natural gas, aluminum, copper, lead, nickel, zinc, gold, and silver. The GSCI is weighted according to their global production levels.

The S&P GSCI index committee has five members who are responsible for the methods and calculations in the index. The committee also determines which commodities will be in the index. The index was normalized to a value of 100 on January 2, 1970, in order permit comparisons of commodities prices over time. To ensure continuity, sometimes the index adjusts via a "normalizing constant" when the weights of the underlying commodities change. The value of the GSCI on each business day is therefore equal to the total dollar weight of the GSCI divided by the normalizing constant.

Goldman Sachs began publishing the GSCI in 1991. Futures contracts on the GSCI and options on those futures contracts began trading on the Chicago Mercantile Exchange in July 1992. 

Why Does the Goldman Sachs Commodity Index (GSCI) Matter?

The GSCI is the most widely used index of global commodities futures prices. The production weighting of the index is designed to reflect the relative significance of each of the commodities to the world economy (but considerations are made for preserving the tradability of the index by limiting eligible commodities to those with adequate liquidity).

Ask an Expert about Goldman Sachs Commodity Index (GSCI)
At InvestingAnswers, all of our content is verified for accuracy by Paul Tracy and our team of certified financial experts. We pride ourselves on quality, research, and transparency, and we value your feedback. Below you'll find answers to some of the most common reader questions about Goldman Sachs Commodity Index (GSCI).
Be the first to ask a question

If you have a question about Goldman Sachs Commodity Index (GSCI), then please ask Paul.

Ask a question

Paul has been a respected figure in the financial markets for more than two decades. Prior to starting InvestingAnswers, Paul founded and managed one of the most influential investment research firms in America, with more than 2 million monthly readers.

If you have a question about Goldman Sachs Commodity Index (GSCI), then please ask Paul.

Ask a question Read more from Paul

Read this next

Paul Tracy - profile
Ask an Expert about Goldman Sachs Commodity Index (GSCI)

By submitting this form you agree with our Privacy Policy

Share
close
Don't Know a Financial Term?
Search our library of 4,000+ terms