Gold versus industrial metals – Not an “either/or”

Gold prices have dipped amid rising crude oil prices, a stronger dollar, and higher bond yields. Gold is undergoing a short-term correction, yet it retains its intrinsic value. The market anticipates sticky inflation and central bank interest rate changes. As a non-yielding asset, industrial metals are capitalizing on the current situation.

The gold consolidation is due to profit-taking and price corrections, prompting investors to diversify their portfolios. Financial institutions view this pullback as a strategic opportunity rather than a structural collapse. Investors are shifting towards industrial metals like zinc, aluminum, and copper, as gold consolidates. Infrastructure demand, clean energy transition, and global supply deficits are favoring these metals.

Copper is gaining traction due to its demand in electric vehicles, data centers, artificial intelligence, and construction. Investors are participating in industrial metals through derivative contracts, global ETFs, and multi-asset allocation funds. However, industrial metals cannot replace gold, as they serve different purposes.

Structural challenges, like unpredictable local premiums, could impact their performance. Tariff adjustments by the U.S. and globally are disrupting supply chains. Instead of choosing between gold and industrial metals, a balanced strategy in the portfolio is advised.