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2026-06-30 12:11:47 G Sachs published a report stating that as energy flows through the Strait of Hormuz begin to normalize, the bank reviewed the year-to-date performance of commodities and emphasized that the energy supply shock triggered by the Iran conflict is only the latest example over the past year demonstrating why strategic portfolios can benefit from diversified commodity investments. Investing in different commodities helps diversify the inherent risks in stock/bond portfolios under different scenarios, including: (1) commodity supply shocks (Strait of Hormuz), which may lead to rising inflation and slowing economic growth; (2) commodities where structural demand supports are facing challenges in supply growth; and (3) capital shifting toward real assets when fiscal sustainability or other financial risks emerge. The bank believes that many of the drivers behind such scenarios, which are favorable to commodity returns, will remain relevant in the future. The bank particularly believes that the Iran conflict ultimately strengthens many themes supporting demand for electricity and metals more than for oil and gas. From potentially higher reliance on electric vehicles, to further investment in renewable energy generation (both of which require additional grid investment), to potential expansion in defense spending and the intensifying AI race, these themes strongly support demand for electricity, copper, lithium and aluminum. Coupled with potential bottlenecks in power infrastructure and the continued high concentration of metal smelting in specific geographic regions, this strong structural support for electricity and metal demand leaves these markets vulnerable to tightening supply shocks. Therefore, while oil and gas have traditionally had a greater impact on inflation and their supply concentration and related geopolitical risks remain, sharp future price spikes may also increasingly occur in electricity, industrial metals and precious metals markets. G Sachs noted that despite the strong rebound in gold prices since 2022, rising 123%, the bank still sees further upside driven by structural factors and eventually cyclical factors. Structurally, diversification by emerging market central banks following the freezing of Russian reserves in 2022 remains the cornerstone of the bank's forecast for gold prices to reach USD4,900 per ounce by end-2026. Although the pace of central bank gold purchases has slowed to around 50 tonnes per month based on seasonally adjusted three-month and 12-month moving averages, the bank believes the ongoing diversification trend is structural in nature. A recent survey by the World Gold Council supports this view: among 76 central banks surveyed between February and May, a record 45% expected to increase gold reserves over the next 12 months, while about 90% expected global reserves to rise, with the remainder largely expecting stability. Therefore, the bank assumes central banks will continue accumulating gold at a pace of 50 tonnes per month in 2026 and 40 tonnes per month in 2027. However, cyclically, gold faces short-term headwinds as demand for macro policy hedging may be hit because a hawkish Federal Reserve helps weaken the currency depreciation theme, while markets are pricing in Federal Reserve rate hikes this year amid inflation concerns, putting pressure on interest rate-sensitive ETF demand. The bank expects these headwinds to at least partially reverse over time. While the bank assumes stable demand for gold as a macro policy hedge, it expects ETF holdings to gradually rise, in line with its economists' view of a delayed but sustained easing cycle in 2H27. Over the medium term, risks to the bank's gold price forecasts remain skewed to the upside overall. Gold still accounts for a small share of private portfolios, while the Iran incident, together with broader geopolitical developments such as Greenland and Venezuela, may ultimately accelerate private diversification into gold, including through weakening perceptions of Western fiscal sustainability. (ad/da)~ AASTOCKS Financial News Website: www.aastocks.com This article was automatically translated by AI, the Chinese version should be considered the authoritative version. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation. | |