"Until we see sustained signals of growth recovery, we do not feel comfortable taking equity risk, particularly as valuations are near peak levels," it said.
"Our equity strategists have become more defensive, owing to heightened drawdown risk and growth scarcity," it added in a note dated May 17.
Goldman Sachs said commodities had rallied on the back of a dovish U.S Federal Reserve, Chinese economic data and supply disruptions. It upgraded commodities, saying that such supply disruptions should support oil prices.
"We think continued fundamental adjustments in both the physical and capital markets are needed, and now see oil prices reaching $60/bln in 4Q 2017 vs. mid-2017 previously. We remain bearish on metals."
It stayed "overweight" on credit over both 3- and 12-month horizons. It remained "underweight" on bonds, but lowered its bond yield forecasts in the major advanced economies by an average of 30-40 basis points.
"Given we do not see much value across asset classes and we see a variety of cross-asset risks, we remain 'Overweight' cash near term. We believe the market's dovish pricing of the Fed increases rate shock risk, in which case both equity and bonds could sell off."