Investment bank’s “Power Race” vs. “Supply Waves” thesis predicts a multi-year decoupling in commodity markets, favoring strategic metals over energy.
In a striking forecast for 2026, Goldman Sachs has laid out a major divergence trade for global commodities: aggressively buy gold while selling oil.
The bank’s latest outlook, led by head of commodities research Daan Struyven, argues that two powerful structural forces—the “Power Race” and “Supply Waves”—will split the market, driving precious and strategic metals higher even as energy prices face prolonged pressure.
The “Power Race” Fuels Metals
The “Power Race” refers to the intensifying strategic competition between the U.S. and China, focusing on artificial intelligence, energy security, and military modernization. This race is fundamentally metals-intensive, fueling demand for gold, copper, and other materials critical for data centers, electrification, and defense. Goldman identifies gold as its single favorite long commodity, forecasting a rise to $4,900 per ounce by December 2026.
A core pillar of this bullish gold view is relentless official sector demand. The bank expects central banks to continue purchasing approximately 70 tonnes per month in 2026, a pace roughly four times the pre-2022 average. Notably, Goldman points out that despite gold’s historic rally, retail investment via ETFs remains uncrowded, leaving ample room for further price appreciation amid geopolitical risks and potential policy easing.
“Supply Waves” Drown Energy
Conversely, “Supply Waves” describe the influx of new energy supply from years of past investment, hitting markets where demand growth is slowing. Goldman expects Brent crude to average just $56 a barrel in 2026, with WTI around $52—significantly below current levels. The bank warns that resilient U.S. output and growing non-OPEC production are likely to create a supply surplus, capping prices unless OPEC+ enforces deep, sustained cuts or major geopolitical supply disruptions occur.
Other Key Commodity Calls:
- Copper: Expected to consolidate near $11,400 a tonne, remaining the favored industrial metal long-term due to electrification and grid investment.
- Battery Metals: Goldman advises avoiding lithium and nickel, forecasting lithium prices to fall another 25% by end-2026 due to a supply glut driven by China’s strategic push and new projects.
- Natural Gas: A global LNG glut is expected to pressure prices in Europe and Asia, but strong U.S. export demand should support domestic Henry Hub prices through 2027.
The report concludes that in a world where electricity, data, and security are paramount, commodities are decoupling. The clear trade is to ride the metals tied to the geopolitical and technological “Power Race” and step aside from energy markets overwhelmed by “Supply Waves.”
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