Goldman Sachs' highest conviction trade is long gold for 2026, expecting gains beyond the 65% seen this year.
speaker1
Samantha Dart
The main structural driver of the gold rally since 2022 has been incremental EM central bank buying for reserve diversification, especially after Russian asset freeze.
Gold is not necessarily an inflation hedge, as Goldman expects inflation to return to target.
speaker1
Samantha Dart
This is about diversification of central bank reserves, not inflation hedging.
Is China building optionality against the dollar?
speaker1
Samantha Dart
It's more of a financial hedge - gold reserves provide safety against others taking dollar-based assets.
Another high conviction trade is short long-dated European natural gas, related to Russia-Ukraine situation.
speaker1
Samantha Dart
Europe has diversified gas imports since 2022 Russian curtailment, and global LNG supply is entering 7 years of tremendous growth starting 2025.
What's the base case for Venezuela next year?
speaker1
Samantha Dart
Base case is status quo with Venezuela producing ~900k barrels/day, but recent oil sell-off included back of curve pressure on regime change concerns.