The metals market is mainly divided into precious metals (gold, silver, platinum, palladium) and industrial metals (copper, aluminum, nickel, zinc, etc.). These resources play a crucial role in the global economy:
- Precious metals serve as safe-haven assets and are used in jewelry, technology, and central bank reserves.
- Industrial metals are essential for construction, electronics, automotive, and the energy transition, particularly for the production of batteries, cables, and infrastructure.
The market combines speculative factors, economic fundamentals, and geopolitical influences, which often leads to rapid and violent price movements. Major players include integrated mining companies such as Rio Tinto, Glencore, and BHP, as well as specialized traders and investment funds.
Current Economic Environment
Precious Metals: Extreme Volatility
- Gold recently fluctuated between $4,400 and $4,900 per ounce, illustrating flash crashes followed by massive rebounds.
- This volatility purges recent speculative excesses, but fundamentals remain solid:
- Regular purchases by central banks,
- Geopolitical tensions and macroeconomic uncertainty,
- Sustained demand for safe-haven assets during periods of instability.
Industrial Metals: Relative Stability
- Copper is stabilizing around $12,900 per ton in London, supported by:
- Steady industrial demand, particularly for infrastructure and the energy transition,
- Supply constraints, maintaining a balance between price and volume.
Mining Company News
- Rio Tinto and Glencore ended their merger talks, which Glencore considered undervaluing its copper assets.
- A merger would have created the largest mining group in the world, significantly impacting production, metal prices, and global competition.
Investment Recommendation
Why Invest in Metals?
- Geopolitical and inflation hedge: Precious metals, particularly gold and palladium, serve as a hedge against uncertainty and inflation.
- Solid fundamentals: Central bank purchases, international tensions, and industrial demand support prices.
- Short-term volatility opportunities: Violent price movements provide attractive entry points for tactical or speculative positions.
- Structural demand for industrial metals: Copper, nickel, and aluminum benefit from the energy transition and infrastructure growth, offering medium- to long-term upside potential.
Points of Caution
- High volatility: Risk of sudden and rapid price swings that could lead to significant losses.
- Geopolitical factors: International tensions can amplify price fluctuations in both precious and industrial metals.
- Speculation and market reactions: Markets may overreact to mining or macroeconomic announcements.
Conclusion / Recommendation
Invest with caution and strategy (Buy with Risk):
The metals market offers a combination of inflation protection and speculative rebound opportunities. It is recommended to diversify between precious and industrial metals, adjusting exposure according to investment horizon and risk profile.