Copper, lithium unlikely to match gold’s gains as output rises: Goldman

Producers across the world are likely to ramp up output of commodities such as copper and lithium, limiting the kind of runaway price gains seen in gold even as markets anticipate a prolonged rally in raw materials, Goldman Sachs said.

Gold has surged to record highs, while a range of other commodities have also climbed, as governments and investors seek the perceived “insurance” value of hard assets amid geopolitical tensions and policy uncertainty, the US bank said in a report addressing what the bullion rally might signal for the broader commodities complex.

But copper, shale oil and other resources are unlikely to mirror gold’s trajectory. The main distinction, Goldman argued, lies in how quickly supply can respond.

Policies aimed at strengthening supply security could also encourage overproduction in some markets, potentially increasing concentration risks and price volatility.

“While we expect long-term gold prices to rise further, we see more differentiated returns across the broader commodity space in the base case,” the analysts said.

Gold prices have climbed sharply since 2023, supported by strong central-bank buying, geopolitical strains and a growing shift among investors to hedge against US dollar volatility.

On January 28, bullion briefly surged past US$5,500 an ounce after US President Donald Trump threatened military action against Iran, following a 65 per cent rise in 2025 – the biggest annual jump since 1979.

Beyond gold, commodity prices – particularly metals – have rallied in recent months, helped by sharp gains in copper and silver.

The rapid expansion of artificial intelligence has boosted industrial demand for these metals through large-scale data-centre buildouts, power infrastructure investment and electronics production.

The IMF’s World Commodity Price Index rose 5.24 per cent in January, its biggest monthly increase since August 2022.

HSBC expects commodities to enter a “super bull” phase that could persist for more than a year, forecasting an 8 per cent rise in aggregate prices in 2026 despite a sharp correction in gold and silver on January 30.

The pullback followed reports that former Federal Reserve governor Kevin Warsh may become the next Fed chair, triggering the US dollar’s largest one-day gain since May 2025.

China International Capital Corporation (CICC) said recent volatility in precious metals was largely driven by previously overheated speculative positioning. It expected gold’s longer-term uptrend to remain intact, with silver likely to remain more volatile.

Shen Meng, a director at Beijing-based investment firm Chanson & Co., said many investors were increasingly turning to metals as a hedge against currency weakness.

Whether it was precious metals or industrial metals, “they are all rising,” Shen said.

“This definitely indicates that investors are worried that money is losing its worth and want to swap it for something that holds value better before substantial currency devaluation occurs,” he said.