Goldman Sachs 2026 Commodity Outlook: Bullish on Gold and Copper, Oil Prices Expected to Fall and Then Rise

Goldman Sachs released a report on Thursday stating that it is expected that by December 2026, the price of gold will rise by 14% to $4900 per ounce under the basic assumption, and pointed out that there is upward risk to the price of gold due to the diversification of private investors' allocations. In the report discussing the outlook for commodities in 2026, Goldman Sachs indicated that it is expected that the structurally strong central bank demand and cyclical support from the Fed's rate cuts will push up the price of gold, and continued to recommend holding long positions in gold. As of the time of writing, spot gold was trading at $4324.56 per ounce. The bank also predicted that the price of copper will fluctuate horizontally in 2026, with an annual average price under its basic assumption (namely that tariff uncertainty will continue until mid-2026 and the possibility of the US imposing tariffs on refined copper in 2027), set at $11,400 per ton. "Despite recent increases in copper prices and our expectation for consolidation in 2026, copper remains our 'most favored' industrial metal, especially in the long term, as electrification (contributing to nearly half of copper demand) implies structurally strong demand growth, and copper mine supply faces unique constraints," Goldman Sachs pointed out. As of the time of writing, three-month copper futures on the London Metal Exchange fluctuated slightly to $11,801.00 per ton, having touched a historical high of $11,952 per ton last week. The bank predicted that Brent and WTI oil prices will decrease further, with average prices in 2026 set at $56 per barrel and $52 per barrel, respectively. "Unless there are major supply disruptions or OPEC cuts, lower oil prices may be needed to rebalance the market after 2026," the report added. As of the time of writing, Brent crude was trading at $59.68 per barrel, while US WTI crude was close to $55.86 per barrel. As the market begins to anticipate a rebalancing, Goldman Sachs expects oil prices to reach a low point around mid-2026. The report noted that this will be driven by strong demand growth of around 1.2 million barrels per day, further reduction in Russian supply due to ongoing Ukraine war and sanctions, and a slowdown in non-OPEC (excluding Russia) production growth. "We believe there are downside risks to the oil price outlook for 2026-2027," Goldman Sachs stated. However, Goldman Sachs stated that as the market begins to price in a return to supply shortages in the second half of 2027 and shifts focus to incentivizing long cycle production, it assumes that oil prices will rebound in the fourth quarter of next year. The report added that by the end of 2028, Brent and WTI oil prices are expected to gradually rise to $80 per barrel and $76 per barrel, respectively. For natural gas, Goldman Sachs predicted that ownership transfer facility prices will be 29 per megawatt-hour in 2026, and 20 in 2027 to incentivize additional demand; at the same time, it is expected that US natural gas prices in 2026 and 2027 will remain at $4.60 per million British thermal units and $3.80 per million British thermal units, respectively, to stimulate growth in US natural gas production. Goldman Sachs stated that it is expected that the reserve capacity of US electricity will continue to decrease, as coal-fired power plants retire at a rate surpassing the increase in renewable energy and natural gas generation capacity. "Therefore, the US electricity market faces significant price increases and even the risk of power outages. In local electricity markets where data centers are thriving, this risk is particularly severe - 72% of data centers in the US are concentrated within 1% of counties," the report added.