Goldman Sachs annual institutional survey: US stocks fall out of favor, Mag7 underperforms, geopolitics becomes the biggest "gray rhino," gold price could 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 the macro level, investors have never been so optimistic (strong GDP forecasts, recession risks gone); but on the micro allocation, they are frantically searching for safe-haven assets (gold, non-U.S. markets) and view "geopolitics" as the Sword of Damocles hanging overhead.

Macro Narrative Reconstructed: Recession Is Dead, Geopolitics Reigns Supreme

Wall Street seems to have declared victory over the economic cycle. The survey shows that fear of a U.S. economic recession has almost been "eliminated". Over 80% of clients expect U.S. GDP growth to exceed 2% in 2026, an outlook even more optimistic than Bloomberg's consensus forecast (2.1%). In stark contrast, no one (0%) believes a recession will happen.

However, despite strong expectations for economic fundamentals, the risk radar is sounding a shrill alarm.

Geopolitical risk overwhelmingly tops the list as the greatest threat to the global economy and markets in 2026, at 65%—more than double last year's 30%. By comparison, "inflation" risk—once the market's bogeyman—has dropped to 12%, while trade risk plunged from 41% last year to just 4%.

This means market pricing has completely factored out hard landing risks, and ignored the possibility of an inflation rebound. This itself is a huge expectation gap—when everyone believes the economy is safe, any minor negative data can trigger sharp market volatility. Geopolitics, as an unpredictable binary risk, is now the largest "black swan" breeding ground in market pricing.

Central Bank Policy Expectations: More Dovish Than the Fed

Despite strong U.S. economic data, institutional investors are still thirsting for "easing".

The survey’s weighted average expectation is that the Fed will cut rates by 70 basis points (about 3 times) by 2026—more aggressive than current market pricing (about 50 basis points/2 times).

Even more interesting, investors are also more dovish on the Bank of England (BoE) and European Central Bank (ECB) than market pricing. Despite ECB officials' frequent hawkishness, 35% of investors still expect ECB rate cuts; for BoE, expectations reach a 60 basis-point cut.

This means the market is currently in "Goldilocks" illusion mode: strong growth plus central bank rate cut support. Yet historical experience shows this perfect script rarely stands up to the test of reality for long.

Equity Strategies Flip: Go Long China, Short “U.S. Stocks Faith”

The “buy U.S. stocks with your eyes closed” strategy is now faltering. While 82% of respondents are bullish on global equities for the year, there has been a drastic shift in regional preferences:

U.S. unpopular:  The proportion of respondents who believe the U.S. will be the best-performing region 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) is the most favored region, with a 38% vote rate.

China asset expectations rebound:  The proportion who believe China will offer the best long-term investment opportunity jumped from 9% over the past two years to 25%, second only to India's 33%. This shows smart money is re-evaluating China’s asset value amid very low valuations and policy shifts.

By style, while tech stocks remain the top pick (31%), their lead is narrowing sharply. Notably, 60% of investors now expect the S&P 493 to outperform the “Magnificent Seven”. This signals that the highly crowded “AI giants trade” may be unwinding, with capital flowing to long-neglected value havens.

Hard Asset Frenzy: Gold Targeted at $5,000, Oil Deep in Bear Market

The commodity market shows extreme divergence, directly reflecting investor distrust of fiat systems and their judgment on real economy supply and demand:

Copper is the new oil:  45% of investors believe copper will yield the highest return among commodities in 2026, three times last year’s rate. This is directly related to the surge in electricity demand from AI data centers and electrification.

Gold faith surges:  Gold prices have already surged 65% in 2025 (currently around $4,510/oz), but bulls are unrelenting. 42% believe gold will continue its rally to the $5,000–$6,000 range, and 10% see prices going above $6,000. Only 7% expect gold to fall back below $4,000.

Oil abandoned:  Energy bulls have totally surrendered. 54% of respondents forecast Brent crude falling below $60/barrel (last year just 5%). This reflects extreme pessimism about oversupply from non-OPEC producers and peak global demand.

This “buy metals, sell oil” strategy is essentially a bet on an “electrified future” and a short on the “fossil energy era.” Meanwhile, frenzied expectations for gold prices not only bet on central bank gold buying, but are also the most direct safe-haven response to geopolitical turmoil.

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The above highlights are from Windchasing Trading Desk.

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