Goldman Sachs metal manager discusses "gold, silver, copper, aluminum": gold and silver are under pressure, copper is risky, aluminum is most certain.

On June 4th, during Goldman Sachs' program "The Macro Call," host Adam Crook interviewed Tony Kim, the head of global metal and bulk commodity trading at Goldman Sachs, to discuss the market outlook for gold, silver, copper, and aluminum. Tony Kim believes that gold and silver have cooled down after experiencing crowded trades earlier this year. Regarding gold, he mentioned that the current environment is very challenging and it's difficult for the price to reach new highs. Breaking through $6000 for gold would be a significant challenge. Copper, on the other hand, has been pushed higher by AI data center demand and expectations of US tariffs, but high inventories are weakening the bullish narrative. In contrast, aluminum has a more clear short-term supply and demand imbalance due to supply disruptions in the Middle East. However, Kim emphasized that when looking at these popular trades, it's important to consider factors such as positions, inventories, term structures, and policy implementation pace. Gold and Silver: Institutions have sold over $40 billion, a "huge challenge" for gold to reach $6000 In the first half of the year, the precious metals market experienced significant volatility. When gold reached new highs in January, market sentiment was extremely bullish, with strategies like call options heavily deployed. However, with the liquidity sell-off triggered by geopolitical conflicts, market positions have now dropped significantly to levels similar to the third quarter of last year. Regarding the question of whether gold can reach $6000 per ounce, Tony Kim expressed a skeptical attitude. He pointed out that oil-producing countries in the Middle East have reduced their usual investments in US bonds and gold due to declining oil revenues. Additionally, rising energy and food prices, as well as AI capital expenditure, are pushing inflation higher, leading to expectations of rising nominal and real interest rates. He said, "This does not necessarily mean that gold prices will definitely fall, but the current environment is undoubtedly very challenging for gold, making it difficult to reach new highs. So, I believe that it will be a significant challenge for gold to break through $6000." However, Tony Kim highly affirmed gold as a safe-haven asset. He revealed a key data point: excluding central banks or family offices, institutional investors have sold approximately $40-50 billion of gold since the beginning of the year. Despite facing such massive sell-offs and liquidity sell-offs, the price of gold has remained around $4400 per ounce. He emphasized, "If you had told us at the beginning of the year about this conflict and such massive sell-offs... in my opinion, gold has already accomplished its mission." The "AI filter" and tariff game of copper: inventories reach a five-year high, the bullish logic "difficult to believe" Copper has undoubtedly been the most affected metal by macro narratives this year. A significant amount of funds view copper as a substitute for commodities in AI trading. Additionally, concerns about US tariffs have caused a large amount of physical copper to be transported from the East to the US, leading to the highest US copper inventory levels in the past 20 years. Facing stable copper prices around $12000, Tony Kim poured cold water on it. He pointed out directly that the term structure of copper does not reflect actual supply tightness. "The bulls will say, we all know that the scarcity of supply is coming soon. The demand of AI data centers is real. Tariffs may play a role in boosting prices in the next one or two years. Copper prices have risen significantly. However, I find it difficult to believe in this." Tony Kim stated that global copper supply is currently in excess, not experiencing any shortages, and copper inventories have reached their highest levels in five years. He warned that the implementation of US tariff policies will be a double-edged sword for copper prices. If the tariffs are ultimately not implemented, as the US has already imported excess supply for several months or even more than a year, the market may face a backlash. Therefore, Goldman Sachs is neutral on copper prices in the next three to six months. The "certainty" reversal of aluminum: short-term scarcity may push prices to test $4000 While gold, silver, and copper are facing their respective logical resistance, Tony Kim sees aluminum as a very interesting trading product currently at a crucial turning point. The core DRIVE comes from real physical supply shortages. The Middle East conflict has destroyed many small smelters in the region, causing a tight supply in the spot market during the summer. Tony Kim pointed out, "Due to the severe damage to these smelters, it will take at least until the end of the year to restart production, and some even believe it will take 12 months. Therefore, supply will definitely be continuously affected, and we believe prices may need to further rise, or even test $4000, which is about a 10% increase from the current price." However, he also reminded that this is not a long-term one-way bull market. Indonesia is currently adding a large amount of aluminum supply. Once Middle East supply is restored between December of this year and the first half of next year, the market will quickly shift to oversupply. Above is the transcript of the interview between Tony Kim and Adam Crook. Thank you.