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Commodities traders at Goldman Sachs (NYSE: $GS ) have sounded an alarm on the current rally in copper's price.

The investment bank warns that the 23% surge in copper's price since November has been driven largely by speculation rather than fundamental factors.

Goldman Sachs notes that copper's price increase earlier in 2025 was driven by the U.S. dollar, China growth expectations, and market tightness.

But the more recent rally, which drove copper's price above $13,000 U.S. a ton for the first time, is not the result of fundamentals but speculators in the metals market.

Goldman Sachs' analysts point out that copper inventories in the U.S. have risen over the past six months, a development that would normally drive copper's price lower.

At the same time, demand for copper in China remains tepid and the available global supply is in surplus.

However, speculators continue to bid up the price of copper on expectations that the U.S. will eventually levy import tariffs on the red coloured industrial metal.

Goldman Sachs continues to expect that the U.S. will announce copper tariffs in the middle of 2026 but hold off on implementing them until early 2027.

Analysts at Goldman warn investors that copper's price could fall in the near-term as market realities come into focus and the metal gets repriced.

GS stock has gained 59% over the last 12 months to trade at $975.86 U.S. per share.