Goldman Sachs is tempering its bullish view on copper, warning that its 2027 price forecast of $15,400 a ton may be too high. The investment bank says the bigger risk to prices is not a shortage of physical metal, but the unwinding of investor bets tied to the artificial intelligence (AI) trade.
In a note following the US midterm elections, Goldman said that if investors cut their AI-linked exposure, copper could average around $14,600 a ton in 2027, or even $14,500 if expectations for US tariffs fade and the country is less likely to build inventories. The bank's revised range of $14,500-$14,600 represents a meaningful downgrade from its earlier forecast.
Why copper is caught up in the AI trade
Copper has become a favorite among investors betting on the AI boom. Data centers, which power AI models, require vast amounts of wiring and cooling systems, and the electrical grids that feed them need significant upgrades. All of that uses copper, making the metal a natural beneficiary of the AI narrative.
But Goldman argues that the recent price action is being driven more by financial positioning than by actual demand from mines and factories. The bank pointed to an “AI rout” and noted that three-month copper on the London Metal Exchange (LME) was trading around $13,612 a ton, up 0.2% on the day but still heading for a weekly loss.
In other words, the metal's price is increasingly influenced by how investors feel about AI stocks and the broader tech sector, rather than by how much copper is being consumed in the real world.
What 'positioning' means for copper prices
When a bank like Goldman highlights “positioning,” it's referring to the bets that leveraged investors—such as hedge funds and commodity trading advisers—place in futures markets. These investors can pile into a trade when sentiment is bullish, but they can also unwind those positions quickly when the mood shifts.
Because copper futures are highly liquid, selling pressure can hit benchmark prices faster than changes in physical supply and demand. The three-month LME contract is the most widely used reference point for copper prices globally, and it's where leveraged investors can de-risk in a hurry. That means a wave of selling can push prices down even if the underlying physical market looks unchanged.
This dynamic can also affect LME time spreads, which measure how tight near-term supply is versus later delivery. When investors liquidate positions, they often reduce the premium they were willing to pay for metal now, which can compress those spreads and signal that the market is less worried about immediate shortages.
What it means for investors
For everyday investors, the key takeaway is that copper prices may become more volatile as the AI trade ebbs and flows. Goldman's revised view suggests that the metal could swing more sharply within the $14,500-$15,400 range for 2027, depending on how investor sentiment evolves.
That volatility matters for companies that hedge their copper costs or price their products off LME benchmarks, such as miners, manufacturers, and utilities. It also affects investors who hold copper-related stocks or exchange-traded funds (ETFs).
Goldman's warning is a reminder that commodity prices are not just about supply and demand. Financial flows can move markets in ways that diverge from physical reality, at least in the short term. For copper, the AI narrative has been a powerful driver, but it can cut both ways.
Investors should also keep an eye on policy headlines, particularly around US tariffs. Goldman noted that if tariff expectations fade and the US is less likely to build inventories, that could push copper prices toward the lower end of its revised range. In other words, political decisions may matter mainly for how they change investors' willingness to hold the trade, rather than for immediate changes in consumption.
For those following the broader metals market, the recent slide in copper, gold, and silver prices shows how interconnected these assets can be. And the AI-driven volatility isn't limited to copper—it's also affecting tech stocks and broader markets.
Ultimately, Goldman's revised outlook is a cautionary note for anyone betting on copper's AI-driven rally. The metal's long-term fundamentals may still be solid, but the path to $15,400 could be bumpier than previously expected.
