Goldman Metals Head: Gold and Silver Under Pressure, Unlikely to Hit New Highs; Aluminum Shortage Most Certain; Neutral on Copper
Taylor Wilson
Goldman Sachs metals chief Tony Kim says institutions have net-sold $40–50 billion in gold this year; pushing gold to $6,000 faces stiff resistance. Of four metals, aluminum's supply gap from damaged Middle East smelters is the most certain trade, while copper stays neutral on record-high inventories.
Institutions are dumping gold — why hasn't the price collapsed?
Institutional investors (excluding central banks and family offices) net-sold roughly $40–50 billion in gold this year, yet the price still holds near $4,400 per ounce.
This means → gold fulfilled its safe-haven role, but positioning has reset to Q3-last-year levels. The early-year bullish crowding has been fully unwound.
In plain terms = the big funds already sold most of what they hoarded at the start of the year. Central banks and retail are keeping the floor — but there is not enough fresh buying power to push higher.
What stands in the way of $6,000 gold?
Middle East oil producers, facing declining oil revenue, are cutting dollar investments in Treasuries and gold — a traditional source of demand is stepping back.
Rising energy and food costs plus AI-related capex keep pushing inflation higher; markets now price in both nominal and real rates moving up.
This means → higher rates raise the opportunity cost of holding gold, squeezing buying incentive from both sides. Kim was blunt: "It doesn't mean gold will fall, but the environment makes new highs very difficult."
Can silver still break $100?
Early this year silver was pushed up by three forces at once: tariff expectations drove physical silver from London to New York vaults, Indian and Chinese retail imports kicked in, and leveraged ETFs piled on.
Then a February liquidation wave hit — some leveraged ETFs were forced to de-lever as prices dropped 25–30%. The speculative fever has broken.
Kim sees silver tracking gold closely; industrial demand is not the marginal driver. In plain terms = silver's "independent rally" narrative did not hold — it still moves with gold.
Copper is being traded as an "AI proxy" — but what do inventories say?
Heavy capital flows treat copper as "the commodity proxy for the AI trade," while tariff expectations have driven physical copper into U.S. warehouses.
The result: U.S. copper inventories are at a 20-year high; global stockpiles sit at a five-year high. The term structure — the spread between near and far contracts — shows no real supply tightness.
This means → the market tells an "AI needs copper" story, but the warehouses are full. Narrative and reality have decoupled.
What two-way risk does copper still face?
Tariffs land → import channels close, the supply chain is cut.
Tariffs don't land → the U.S. has already over-imported months' or even a year's worth of supply; the excess will weigh on prices. A similar episode last summer sent copper down more than 10%.
Goldman therefore holds a neutral view on copper over the next three to six months — regardless of the tariff outcome, copper is not a clean directional bet.
Why is aluminum the most certain trade right now?
The core logic is a real physical shortage: Middle East conflict destroyed several small smelters, and spot-market supply must tighten this summer.
Damaged smelters need until year-end at the earliest to restart; some require 12 months. Kim sees aluminum potentially testing $4,000 — roughly 10% above current levels.
But this is not a long-term bull case. Indonesia is adding significant new aluminum capacity; once Middle East supply comes back between December this year and mid-next-year, the market flips quickly to surplus. In plain terms = aluminum's opportunity window depends on exactly how long Middle East smelters stay offline — that timeline is the key variable.
Content is for reference only, not financial advice.