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Goldman Sachs Commodity Index

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The Goldman Sachs Commodity Index, now known as the S&P GSCI, is a diversified, production-weighted index that tracks the price fluctuation of commodities. The Goldman Sachs Commodity Index was first published in 1991 but historical values prior to this date have been calculated using a base value of 100 as of January 2, 1970. In February 2007, Standard & Poors acquired the Goldman Sachs Commodity Index and changed its name to the S&P GSCI. Individual commodity futures contracts qualify for inclusion in the Goldman Sachs Commodity Index based on their liquidity. Those contracts must meet a number of basic criteria to be eligible as a Goldman Sachs Commodity Index component. For example, Goldman Sachs Commodity Index contracts must be on physical commodities only, must have a specified expiration date, must be tradable for at least five months prior to expiration. Goldman Sachs Commodity Index contracts must also allow market participants to execute spread transactions and must be traded through a trading facility located in an OECD member country. Finally, Goldman Sachs Commodity Index contracts must be denominated in dollars, must have at least a two year history of reference prices, and must have available data on trading volume. Each eligible component of the Goldman Sachs Commodity Index is assigned a weight based on its global production quantity (i.e. contract production weight - CPW) which is based on an average of the last five years of production data. Commodity investors can effectively trade the Goldman Sachs Commodity Index by purchasing investment instruments tied to the Goldman Sachs Commodity Index / S&P GSCI either over-the-counter or on the Chicago Mercantile Exchange (CME).

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