What does Goldman Sachs Commodity Index - GSCI mean?
An index that measures commodities price movements and inflation in the world economy. Like the Standard & Poor's 500 index for stocks, the Goldman Sachs Commodity Index (GSCI) is a popular and well diversified index for commodities. It is commonly known as the S&P GSCI.
Futures Knowledge Explains Goldman Sachs Commodity Index - GSCI
The S&P GSCI contains a broad range of 24 commodities. The weights of each commodity in the index is determined by the commodity’s average world production in the last five years. The S&P GSCI is a world-production weighted index, and as a result it is usually heavily skewed to Energy commodities (over 70%). It is based on the most liquid commodity futures, and provides a high level of diversification, both across sectors (ie. energy) and within each sub-sector (ie. Crude oil, Brent crude, natural gas, heating oil).
The Goldman Sachs Commodity Index is a good indicator of global inflation during a particular period. For example, during January-April 2015, the S&P GSCI declined by 0.75% to 3,208...which confirms that the world is facing negative inflation (or deflation).