Goldman Sachs lowers copper price expectations due to Iran conflict threatening the global economy

Goldman Sachs warns that if the Strait of Hormuz remains blocked, gold prices could further decline. Meanwhile, the metals market is on high alert, awaiting the deadline set by U.S. President Donald Trump, by which Iran must reach an agreement or face a comprehensive attack on civilian infrastructure.

“Should the disruption in the Strait last longer than our baseline forecast, we believe short-term risks are skewed to the downside, which could keep energy prices elevated for a longer period and potentially slow global economic growth,” Goldman analysts said.

Goldman’s baseline forecast is that the Strait of Hormuz will begin reopening in mid-April, but analysts noted that copper prices are currently well above their estimated fair value of around $11,100 per ton. Since the U.S. and Israel launched attacks on Iran, copper prices have fallen about 7%.

Analysts stated that tight supply outside the U.S. and widespread strategic stockpiling expectations remain supportive factors for copper prices. However, they added that if the World Bank’s global economic outlook turns “extremely unfavorable,” the impact of these factors could weaken.

They wrote, “The current fundamentals for copper are insufficient to support its price. If economic prospects worsen and investors reduce risk, copper prices could fall further.” The bank has lowered its basic forecast for copper prices this year from $12,850 per ton to an average of $12,650 per ton. So far this year, copper has averaged about $12,850 per ton.