Synopsis:

Goldman Sachs advises long-term investors to overweight gold and underweight oil in strategic portfolios. This shift reflects rising institutional risks in the U.S. and a favorable demand outlook for gold, contrasted with oil's ample supply cushion.

Key Points:

• Gold – Overweight Recommendation:

  • Elevated risk of shocks to U.S. institutional credibility, including:

    • Aggressive fiscal expansion.

    • Potential political pressure on the Federal Reserve.

  • Sustained central bank buying is expected to support gold demand through 2025–2026.

• Oil – Underweight Recommendation:

  • High global spare capacity limits the risk of supply-driven price spikes.

  • Reduced likelihood of oil shortages through 2026 dampens the asset’s appeal in long-term portfolios.

Conclusion:

Amid mounting geopolitical and fiscal uncertainties, Goldman favors gold as a hedge and store of value, while it sees limited upside in oil due to robust supply buffers. Investors are encouraged to recalibrate their strategic allocations accordingly.