Metal prices have extended their strong start to the year, with gold, silver, copper, and tin all reaching record highs, as investors bet that further U.S. interest rate cuts and a recovery in financial market sentiment will boost the market.
Since late 2025, the surge in commodity prices has been astonishing, with traders preparing for the Federal Reserve to further lower borrowing costs to stimulate the economy. This has boosted base metal prices, while precious metals have also benefited from renewed attacks on the Fed by the Trump administration and escalating geopolitical tensions.
On Wednesday, silver prices surged by up to 5.3%, breaking through the $90 per ounce milestone for the first time, while gold prices also set a fresh record. Tin was the standout performer among base metals, climbing as much as 6%, and copper prices regained their upward momentum. Many metals are benefiting from improved prospects for manufacturing demand, including demand from growth sectors like artificial intelligence.
The so-called "debasement trade" has underpinned this rally, particularly in the precious metals market. The "debasement trade" refers to investors selling government bonds and currencies due to concerns over soaring debt levels. A relatively weak U.S. dollar has made dollar-denominated commodities cheaper for many buyers. Gold prices rose 65% last year, while silver prices skyrocketed nearly 150%, both marking their best annual performances since 1979.
Hong Hao, Chief Investment Officer at Lotus Asset Management, stated that gold's price movement typically leads and signals declining confidence in fiat currencies; when all assets are measured against gold as a benchmark, most assets appear cheap now, which is a powerful driver for commodities, especially metals.
Trade Volatility
Base metal prices are benefiting from widespread expectations of tighter supply this year, as global mines and smelters struggle to meet demand. The copper market suffered multiple major shocks last year, while exports from Indonesia, the second-largest tin supplier, have been restricted.
Alexandre Carrier, Portfolio Manager at DNCA Invest Strategic Resource Funds, said, "More and more investors are becoming aware of the structural trends for some metals and the issues on the supply side."
Some commodities—particularly silver and copper—are benefiting from expectations of potential U.S. import tariffs. Part of the reason for rising copper prices is the anticipation that the White House will decide on import tariffs later this year, prompting traders to rush copper to U.S. ports. The market is also awaiting the outcome of the U.S. Section 232 investigation, which could lead to tariffs on silver.
Analyst Liu Shiyao stated that concerns over potential tariffs on silver have led to significant hoarding of the metal within the U.S., limiting the amount of silver flowing into the global market.
The latest surge in metal prices highlights strong investment inflows and persistently high speculative interest. Trading volumes on exchanges such as the New York Mercantile Exchange have remained elevated since the end of December.
Geopolitical events, including U.S. President Donald Trump's actions against Venezuelan leadership, renewed threats to annex Greenland, and protests in Iran, have also heightened safe-haven demand in the market. Citigroup analysts this week raised their three-month price targets for gold and silver to $5,000 per ounce and $100 per ounce, respectively.
However, many remain cautious about industrial metal prices. For instance, both Citigroup and Goldman Sachs Group expect copper prices to retreat later this year.
