Precious metals - underdelivering, but not broken

Gold has, for now, fallen short of expectations. In a backdrop that should have been supportive - geopolitical tension, elevated uncertainty - the price action has been more muted than anticipated.

The reason sits in flows, not fundamentals.

Parts of the market - including sovereign and institutional holders - have liquidated gold positions to fund fiscal pressures, war-related spending, or rebalance portfolios after the rally. That early selling phase capped upside and created the sense that gold “missed the moment.”

But structurally, very little has changed.

Gold still sits on solid long-term demand, particularly from central banks and new institutional buyers. It remains a portfolio anchor - less explosive, more stable.

Looking ahead, the next leg higher is less about geopolitics and more about macro alignment:

If growth weakens while inflation remains sticky, forcing the Fed toward rate cuts, gold is likely to rebuild support and regain momentum.

That said, risks remain.

• Fiscal-driven gold sales could persist 
• Emerging market buyers (China, India, Brazil) may slow accumulation if global growth deteriorates 

Silver - lagging now, tightening underneath

Silver has underperformed gold, largely due to its hybrid nature - part monetary metal, part industrial input.

In the short term, concerns around global growth and industrial demand have weighed on sentiment. But that’s only one side of the equation.

The more important dynamic is supply.

So while price action has been softer, the underlying setup remains constructive:

• Physical availability is tightening
• Demand tied to the energy transition (solar, electrification) remains steady 

This creates a familiar imbalance: Short-term weakness, long-term pressure building.

PGMs - diverging fundamentals

The platinum group metals are no longer moving as a single story.

• Palladium remains under pressure
  • Structural demand is weakening as the shift toward electric vehicles reduces its use in catalytic converters
  • High recycling rates further weigh on prices
• Platinum is relatively better positioned
  • Supply constraints, particularly in South Africa, are tightening the market
  • Fundamentals appear more supportive versus palladium

Base metals - resilience despite macro stress

Despite geopolitical risks and concerns over a broader slowdown, base metals have shown relative resilience.

• Copper corrected after reaching record highs earlier in the year but remains supported by structural demand
  • Electrification
  • Grid investment
  • Data centre expansion

This demand is less cyclical and more secular - meaning dips tend to find buyers.

• Aluminium has outperformed within the complex
  • Middle East disruptions (8–10% of global production) have tightened supply
  • Gas shortages and Strait of Hormuz constraints have forced production cuts
  • Substitution from copper (when copper prices surged) has added further demand

Inventories across both metals are trending lower, reinforcing the idea that supply constraints are becoming a recurring theme across commodities.