This article first appeared on GuruFocus.

Copper's surge past $11,000 a ton has become the market's new obsession, but Goldman Sachs (NYSE:GS) is offering a reminder that the story could be more fragile than it appears. The metal ripped to a record $11,540 a ton on Wednesday as traders rushed supply into the US ahead of upcoming tariffs, fueling a wave of speculation around an impending shortage. But Goldman's analysts, led by Aurelia Waltham, argued that most of the rally is being driven by anticipation rather than present-day fundamentals. The bank does not expect copper to hold above $11,000 for long, even as tariff-driven flows may keep the narrative energized.

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Goldman lifted its copper forecast for the first half of next year, but the bank still believes global inventories outside the US may avoid hitting critically low levels if higher regional premiums and tighter LME spreads start to bite. The analysts expect demand this year to fall about half a million tons short of supply and do not see the global market entering a true shortage until 2029. Even the much slimmer 2026 surplus of 160,000 tons suggests the market may only drift toward balance rather than flip into a deficit, with prices possibly staying constricted between $10,000 and $11,000 in that year. Still, momentum traders are not waiting for the fundamentals to catch up: copper ticked another 0.1% higher to $11,498 a ton in Singapore on Thursday, extending its year-to-date jump to 31%, while miners across Asia-Pacificfrom Hong Kong's CMOC Group to Australia's Capstone Copperrode the upswing.

But copper's long history of bold calls colliding with on-the-ground realities could be resurfacing. China, the market's engine, has seen activity plunge in recent months, and Goldman is bracing for an almost 8% year-on-year drop in fourth-quarter consumption before a potential 2.8% rebound next year. Meanwhile, a large withdrawal from LME warehouses has stoked new fears of a near-term squeeze, adding fuel to bullish commentary from Chaos Ternary Futures' Li Xuezhi, who said the rally has just started. With sentiment overheating, demand softening, and supply fears ricocheting through every headline, copper's next move could be far less linear than its record-setting chart implies.