Goldman Sachs suggests investors increase their holdings of commodities in both short-term and long-term asset allocations. There are three main reasons: first, the intensification of the geopolitical conflict, the escalation of the war in Iran, attacks on shipping, and damage to energy facilities may drive energy prices to rise sharply, while stocks and bonds are more sensitive to changes in energy prices, making commodities hedging the risk of falling other assets; second, the global supply chain is increasingly concentrated, and the risk of supply disruptions is long-term. Furthermore, the war between Iran, Russia, and Ukraine, the possible strong El Niño phenomenon, and restrictions on food exports may also disrupt agricultural production and international trade and drive up food prices; third, long-term imbalances between supply and demand. Electrification, AI, and data center construction continue to drive up demand for copper and electricity. Diversification of central bank reserves supports demand for gold, and related supply growth is limited. However, Goldman Sachs anticipates that crude oil and European gas prices may fall in line with supply adjustments in the Middle East, so it is more inclined to choose specific energy hedging instruments with large potential to rise.

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