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Goldman Sachs is maintaining their bullish position on gold and copper.  They cite gold as a hedge against low real interest rates and the continuing economic turmoil.   Their 12 month price target on gold is 1,940.  Their copper position is based on continuing supply problems and a relatively bullish outlook for emerging markets (via Goldman Sachs):

Long Copper: Buy June 2012 LME copper (initial price $8,804/mt, current loss $1300/mt)

Although our long copper position opened in May 2011 remains substantially under water, our 12-mo copper price target of $9,500/mt suggests substantial upside from current depressed levels. Further to the macroeconomic catalysts highlighted in the ‘Hedging recommendations’ section above, copper supply disruptions are presenting significant upside risks to copper at present. Industrial action is ongoing at one of the world’s largest mines – Freeport’s Grasberg mine – with mine output having stopped completely in late October, further tightening the concentrate market.

Long Gold: Buy December 2012 COMEX Gold (initial value of $1,800.5/toz, current gain $355.6/toz)

Consumers: We expect gold prices to continue to climb given the current low level of US real interest rates. Further, with our US economics team forecasting slower US economic growth throughout 2012, we expect US real interest rates to remain lower for longer, supporting higher gold prices. Consequently, we recommend near-dated consumer hedges
in gold through 2012.

Producers: With gold prices expected to continue to climb through 2012, we find hedging opportunities less attractive for gold producers at this time.

We expect gold prices to continue to climb in 2012 given the current low level of US real interest rates, and as a result recommend a long gold position.”

Source: Goldman Sachs

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