(Reuters) – Goldman Sachs believes gold has the highest potential for a near-term price hike due to its status as a preferred hedge against risk, while weak demand from China has led to a “more selective, less constructive” view of other commodities.
“Imminent Fed rate cuts are poised to bring Western capital back into the gold market, a component largely absent of the sharp gold rally observed in the last two years,” Goldman analysts said on Monday in a note titled ‘Go for Gold’.
Spot gold has gained 21% so far this year, breaking successive records and hitting a historic high of $2,531.60 per ounce on Aug. 20. [GOL/]
The Wall Street lender adjusted its gold target of $2,700 to early 2025, versus previous forecast of end-2024, citing a price-sensitive China market.
“We believe that the same price sensitivity also insures against hypothetical large price declines, which would likely reinvigorate Chinese buying.” [GOL/AS]
For oil, Goldman took a more cautious stance as it expects a smaller deficit this summer and a marginally bigger-than-expected surplus in 2025. [O/R]
The bank last week cut its average 2025 Brent forecast and range for prices by $5 per barrel, citing bleak China demand.
The bank sees a clear directional view in global gas, although to the downside as an upcoming wave of global liquefied natural gas supply capacity additions drive European natural gas prices (TTF) lower. [LNG/]
The bank delayed its end-2024 copper target of $12,000 per metric ton to after 2025, noting that a sharp copper inventory depletion it expected will likely come much later than previously thought. [MET/L]
It now sees an average 2025 copper forecast of $10,100 per ton, significantly below their previous estimate of $15,000, as refined copper production remains elevated despite mine supply issues in key copper-producing countries.
Goldman maintained a less firm outlook for other industrial metals and delayed its previous $2,600-per-ton year-end target for aluminum towards end-2025 and lowered its 2025 forecast to $2,540.
The lender said it will suspend zinc coverage for the moment, as it maintains a bearish view on nickel.
(Reporting by Swati Verma in Bengaluru; Editing by Sherry Jacob-Phillips)
