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 per cent so far this year, breaking successive records and hitting a historic high of $2,531.60 per ounce on Aug. 20.

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.”

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.

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.

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.

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.

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