The metals market is experiencing a period of sharp volatility, driven by highly contrasting supply dynamics between industrial metals and precious metals. Aluminum has soared above USD 3,400 per tonne in London, supported by supply disruptions in the Middle East. The closure of a smelter in Qatar and the halt of shipments from Bahrain have created an immediate supply shock, all the more significant as inventories have fallen to their lowest level since 2023. The result is a weekly increase of more than 5%, signalling a market under strain.
Copper, by contrast, is declining. Inventories are rising rapidly, indicating a short‑term oversupply. Cash prices on the LME hover around USD 12,900 per tonne, reflecting a market that is less tight and more driven by industrial fundamentals.
As for precious metals, gold is moving within an uncertain range around USD 5,080 per ounce. Two opposing forces are at play:
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Geopolitical support, linked to the military escalation in the Middle East, which reinforces gold’s status as a safe‑haven asset
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Macroeconomic pressure, with a strong dollar, rising bond yields, and the prospect of the Federal Reserve keeping rates higher for longer due to inflation concerns fuelled by rising oil prices
Key points of the analysis
Aluminum: A brutal supply shock
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Closure of a smelter in Qatar
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Suspension of shipments from Bahrain
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Historically low inventories → Result: a price spike and short‑term shortage risk.
Copper: A market in surplus
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Rapid inventory build‑up
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Softer industrial demand → Downward pressure on prices despite a tense geopolitical backdrop.
Gold: A market pulled in opposite directions
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Geopolitical support (safe‑haven demand)
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Pressure from the dollar and real yields → A price oscillating without a clear trend.
A reinforced inflationary environment
Rising oil prices are reviving inflation fears, which could prompt the Fed to maintain a restrictive monetary stance for longer.
Persistent Volatility
Geopolitical tensions, supply disruptions, and divergences between industrial and precious metals point to continued volatility.
Investment conclusion
The metals market presents a mixed landscape:
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Aluminum enjoys strong upward momentum driven by supply disruptions.
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Copper reflects a more traditional inventory‑driven cycle, with short‑term downward pressure.
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Gold remains a safe‑haven asset, though its upside is limited by the strength of the dollar and interest rates.
For investors, the current environment favors:
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long positions in aluminum,
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a cautious stance on copper,
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tactical allocation to gold depending on geopolitical risk.