Goldman Sachs is advising investors to consider a strategy of holding long positions in gold and short positions in oil as a hedge against a potential global recession spurred by US tariff policies. Daan Struyven, co-head of global commodities research at Goldman Sachs, maintains a structurally bullish outlook on gold, emphasizing its potential to mitigate risks associated with a US recession. Struyven forecasts gold prices could surge to $6,752 per troy ounce during a recession. He highlights gold’s role in offsetting policy risks stemming from US trade policies, Federal Reserve pressures, and institutional changes potentially eroding investor confidence in US assets.
Conversely, Goldman Sachs anticipates a potential double whammy for oil, characterized by reduced demand and increased supply. Struyven projects Brent crude oil prices to decline from around $101 per barrel to approximately $92 by the end of 2025, and further to around $87 by the end of 2026. Oil put options are viewed as attractive insurance against even lower prices, with a worst-case scenario potentially seeing prices rally to around $63 per barrel. OPEC’s decision to increase production further contributes to this outlook, aiming to restore compliance and slow US shale growth. Struyven suggests a selective hedging strategy for 2026, combining long gold positions with short oil positions to navigate market uncertainties.
