Goldman Sachs Annual Institutional Survey: US Stocks Lose Favor, Mag7 Underperform, Geopolitics Becomes the Biggest "Gray Rhino," Gold Price Expected to Reach $6,000

Goldman Sachs has just concluded its 34th Annual Global Strategy Conference in London.

This year's survey results reveal an extremely divided picture: on a macro level, investors have never been so optimistic (strong GDP expectations, recession risks disappearing); but on a micro allocation level, they are frantically searching for safe-haven assets (gold, non-US markets) and view "geopolitics" as a Damocles sword hanging over their heads.

Macro Narrative Reconstruction: Recession is Dead, Geopolitics Reigns

Wall Street seems to have declared victory over the economic cycle. The survey shows that fears of a US economic recession have almost been "zeroed out." More than 80% of clients expect US GDP growth to exceed 2% in 2026, a figure even more optimistic than Bloomberg's consensus expectation (2.1%). In stark contrast, no one (0%) believes a recession will occur.

However, despite strong expectations for economic fundamentals, the risk radar has issued a piercing alarm.

Geopolitical risk has become the biggest threat to the global economy and markets in 2026, with an overwhelming 65%, more than doubling from last year's 30%. In contrast, the once-dreaded "inflation" risk has dropped to 12%, while trade risk has plummeted from last year's 41% to just 4%.

This means that market pricing has completely eliminated the risk of a hard landing while also ignoring the possibility of an inflation rebound. This itself represents a significant expectation gap—when everyone believes the economy is safe, any small piece of negative data could trigger severe volatility. Geopolitics, as an unpredictable binary risk, is becoming the largest breeding ground for "black swan" events in market pricing.

Central Bank Policy Expectations: More Dovish than the Federal Reserve

Despite strong US economic data, institutional investors remain eager for "easing."

The weighted average expectation shown in the survey is that the Federal Reserve will cut interest rates by 70 basis points (about 3 times) in 2026, which is more aggressive than the current market pricing (about 50 basis points/2 times).

Interestingly, investors' views on the Bank of England (BoE) and the European Central Bank (ECB) are also more dovish than market pricing. Despite ECB officials frequently adopting a hawkish stance, 35% of investors still expect it to cut rates; expectations for the Bank of England are even more pronounced, reaching a 60 basis point cut.

This indicates that the market is currently in a "Goldilocks" illusion: strong growth coupled with central bank rate cuts. However, historical experience shows that such a perfect script is usually difficult to withstand the test of reality for long.

Equity Strategy Reversal: Long China, Short "US Stock Faith"

The strategy of "blindly buying US stocks" over the past few years is failing. While 82% of respondents are optimistic about global stock markets rising for the year, a dramatic shift has occurred in regional selection:

The US has fallen out of favor: The proportion of respondents believing the US will be the best-performing region has plummeted from 58% last year to 23%. This is the lowest level since January 2023.

Emerging markets return: Investors are embracing diversification. Asia (excluding Japan) has become the most favored region with a 38% vote share.

Expected recovery of Chinese assets: The proportion of those who believe China will provide the best long-term investment opportunities has rebounded sharply from 9% over the past two years to 25%, second only to India's 33%. This indicates that smart money is beginning to reassess the cost-effectiveness of Chinese assets under extremely low valuations and a policy shift.

In terms of sector style, although technology stocks remain the top choice (31%), the leading advantage is narrowing significantly. More notably, 60% of investors believe that the S&P 493 will outperform the "seven giants." This suggests that the crowded "AI giant club" trade may face disintegration, with funds flowing into long-ignored value areas.

Hard asset frenzy: Gold expected to rise to $5,000, oil deep in a bear market

The commodity market shows extreme polarization, directly reflecting investors' distrust of the fiat currency system and their judgment on the supply and demand of the real economy:

Copper is the new oil: 45% of investors believe copper will be the highest returning commodity by 2026, a figure three times that of last year. This is directly related to the surge in electricity demand brought about by AI data center construction and electrification.

Rising faith in gold: Gold prices have soared 65% in 2025 (currently around $4,510/ounce), yet bulls remain rampant. 42% believe gold prices will continue to rebound to the $5,000-$6,000 range, with 10% expecting prices to exceed $6,000. Only 7% believe gold prices will pull back below $4,000.

Oil abandoned: Energy bulls have completely surrendered. 54% of respondents expect Brent crude oil to fall below $60/barrel (compared to only 5% last year). This reflects extreme pessimism in the market regarding oversupply from non-OPEC countries and peak global demand.

This "buy metals, sell oil" strategy essentially bets on the "electrified future" while shorting the "fossil fuel era." Meanwhile, the crazy expectations for gold prices are not only a bet on central bank gold purchases but also the most direct hedge against geopolitical turmoil