If investors wish to protect their portfolios against tail-risk situations like tariff escalation, they should trust in reliable commodities like gold and oil.
The strategists at Goldman Sachs, under the leadership of Samantha Dart, have reaffirmed their prediction that the price of gold will reach $3,000 per ounce in the second quarter of 2026. Late Thursday saw the note’s publication as gold futures (GC00) broke a previous record by pushing beyond $2,850 an ounce for the first time. On Friday, the price of gold was about $2,846 per ounce.
The potential for an asset price to shift sharply due to an unforeseen circumstance is known as a tail risk. Investors are anticipating if President Trump will follow through on his pledge to impose 10% tariffs on China and 25% tariffs on Canada and Mexico on February 1.
“A scenario of tariff escalation would further support active investor positioning in gold, adding to the base case support to prices we already expect,” Dart and her colleagues stated. In New York markets, physical gold and silver are in high demand due to tariff concerns.
Goldman stated that some of those hedges are probably already in place, so some investors may be ahead of the game given that gold prices increased by more than 7% in January. The analysts went on to say that gold might also protect against concerns about the growing national debt. At the moment, it is the bank’s most confident trade advice for all commodities.
With Brent (BRN00) up 1.5% and continuous crude futures (CL00) up just 1.2%, oil prices have performed worse in January. Despite this, the commodity is still seen as a safe haven that provides security from supply interruptions caused by geopolitics. A near 30% chance of a 25% U.S. tariff on Canadian oil imports is estimated to be priced into the oil market.
“Our subjective probabilities of U.S. import tariffs on aluminum and copper, significantly higher than on Canadian oil, are consistent with our views that aluminum and copper would likely be included in import tariffs targeting critical materials, while Canadian oil tariffs would risk unpopular, if temporary, gasoline price increases in the U.S. Midwest,” the strategists stated.
Trump’s pro-energy supply policies and the opening of federal lands and seas to drilling will have “very little impact on near-term supply growth in the U.S.,” according to Dart and her representatives. According to Goldman, regular discussions with U.S. oil and gas companies indicate that market prices and capital availability have been a greater concern than federal land availability as a growth constraint.
Goldman noted that other markets are pricing in greater tariff probability, such as the U.S. aluminum price reflecting an 85% possibility of a 10% import levy by April. By the end of 2025, the copper market is pricing in a nearly 50% likelihood of a 10% tariff on that commodity. Regarding steel, they estimate that there is a 60% chance that the United States will impose a 10% tax on imports, which would raise domestic spot steel prices by 10%.
