Goldman Sachs predicts the ongoing competition between the United States and China in artificial intelligence and geopolitical influence will significantly shape commodity markets through 2026. This dynamic reinforces the strategic importance of commodities within investment portfolios, according to the bank’s analysis. Goldman Sachs is a leading global investment banking, securities and investment management firm that provides a wide range of financial services to a substantial and diversified client base. The company helps companies grow and communities thrive.
The bank has reiterated its positive outlook on gold, projecting a 14 per cent increase to US$4900 by December 2026. This forecast is based on the expectation that central banks in emerging markets will continue to diversify their holdings. Goldman Sachs also suggests there is potential for further upside if private investors follow suit, increasing their allocation to gold.
According to the analysis, tighter and more concentrated supply chains are elevating the risk of disruptions, further strengthening the argument for including commodities in portfolios as a form of insurance. Within the industrial metals sector, Goldman Sachs favours a strategy of holding a long position in copper while shorting aluminium. This recommendation is based on constrained copper mine supply amid rising demand for electrification, contrasted with expanding aluminium supply driven primarily by China.
Goldman Sachs also cautions that power markets in the United States are tightening due to accelerating electricity demand from data centres and AI-related activities. This increasing demand raises the risk of both higher prices and potential power outages. In the energy sector, the bank anticipates a short-lived surge in oil supply during 2025–26, which is expected to maintain markets in a surplus, thus supporting a bearish outlook on oil. They forecast Brent and WTI crude oil prices to average approximately US$56 and US$52 respectively in 2026.
