AI, rate cuts, and uncertainty: Why metals are back in every portfolio

Key points:

• AI, electrification, and geopolitics are reshaping the global demand for metals, turning copper, aluminium, and gold into barometers of both growth and security.
• Gold, copper, and silver together tell the story of confidence, caution, and change in today’s economy — but each carries its own vulnerabilities: gold to rising yields, copper to growth slowdowns, and silver to volatility.
• Diversified access via ETFs or miners allows investors to participate in structural themes while managing the volatility that defines commodity markets.

Metals are no longer just inputs for factories — they are the foundation of digital power and geopolitical leverage.

Artificial intelligence, the clean-energy transition, and a fragmenting world order have placed metals back at the centre of the global economy.

Copper wires the world’s data centres. Aluminium lightens EVs and aircraft. Gold continues to hedge against inflation and policy uncertainty.

Each tells a story not just of industrial use, but of confidence, control, and caution.

Yet the metal cycle today is far from linear. The same forces that fuel long-term demand can quickly reverse if growth falters, policy priorities shift, or global supply chains are disrupted.

Gold: The mirror of confidence

Gold remains the world’s oldest hedge against uncertainty — and, in many ways, the market’s moral compass.

It tends to rise when trust in policy or financial stability fades. That dynamic has reasserted itself as central banks cut rates, fiscal deficits expand, and concerns grow over the independence of the Federal Reserve amid rising political pressure.

Central banks, especially in emerging markets, have been net buyers of gold for two years. Retail flows have followed, with ETF holdings stabilising after years of decline.

Macro perspective:

• Gold performs best when real yields fall, inflation risks linger, or the U.S. dollar weakens.
• Tensions around Fed independence and the credibility of monetary anchors amplify gold’s appeal as a policy hedge.

• It thrives in uncertainty but also acts as a quiet stabiliser when risk assets run ahead of fundamentals.

Risks:

• A hawkish pivot from central banks or a sudden rebound in real yields can reverse gains.
• Stronger global growth often leads to rotation away from defensive assets.
• Gold’s price momentum can attract speculative flows, increasing volatility on both sides.

Insight:

For portfolios, gold remains the counterweight — a rare constant in a shifting macro landscape.

Its resilience this year reflects both demand for safety and rising unease over policy discipline.

While it has outperformed even in risk-on markets, its strength ultimately stems from what investors question most: the durability of central-bank independence and the credibility of fiat stability.

Copper: The infrastructure of intelligence

If gold represents safety, copper represents ambition.

It’s the metal that connects AI data centres, powers EVs, and carries electricity from renewable grids to homes and industries.

Every server, solar farm, and high-voltage transformer requires copper — and as the digital and energy transitions accelerate, so does its relevance. Analysts expect global copper demand to double by 2035, driven by AI-related infrastructure and grid modernisation.

Macro perspective:

• Copper strength typically signals global optimism, benefiting from investment in technology, energy, and infrastructure.
• Supply tightness and energy-transition spending support medium-term fundamentals.

Risks:

• AI and green-energy projects depend on cheap capital; higher interest rates or slower fiscal support could soften demand.
• Supply remains concentrated in Chile and Peru, exposing prices to political and weather-related shocks.
• A strong U.S. dollar or global slowdown can weigh heavily, given copper’s cyclical nature.

Insight:

Copper may be called “Dr. Copper” for its ability to diagnose the economy, but even good doctors misread the symptoms when policy or geopolitics intervene.

Silver: Between growth and protection

Silver sits between gold and copper — part precious, part industrial.

It reflects both fear and hope, often tracking gold in downturns but outperforming in recoveries.

Its industrial demand — from solar panels to semiconductors — has expanded sharply, linking it to themes like decarbonisation and electrification.

Macro perspective:

• Roughly half of silver demand is industrial, tied to solar panels, semiconductors, and EVs.
• A soft-landing scenario, with slower but positive growth, tends to support both its monetary and industrial sides.

Risks:

• Silver’s volatility is high, often double that of gold.
• A slowdown in manufacturing or solar deployment could cap demand.
• Recycling trends may limit long-term price appreciation.

Insight:

Silver is, in essence, the confidence spread between gold and copper — it widens with optimism and narrows with fear.

Platinum and Palladium: The quiet transition

Platinum and palladium — often overshadowed by gold and silver — have re-entered focus in 2025. Both are precious metals, but their performance has diverged sharply this year, with platinum outperforming gold and silver by a wide margin.

The reasons are not speculative; they’re structural. Platinum sits at the intersection of industrial use and scarcity — and this year’s rally reflects tight supply, revived demand, and investor rotation away from expensive safe-haven assets.

Macro perspective:

• Supply constraints remain the dominant story. The World Platinum Investment Council expects another annual deficit as mine output in South Africa — which accounts for roughly 70% of global supply — faces persistent energy disruptions and lower investment. Above-ground stocks have fallen sharply in recent years, leaving little buffer for the market.
• Demand recovery is broad-based. The automotive sector still relies on catalytic converters, and many manufacturers have shifted toward platinum in place of costlier palladium. Industrial uses and jewellery demand — particularly in China, where high gold prices have pushed consumers toward platinum — have also strengthened.
• Relative value appeal has grown. With gold near record highs and silver volatile, investors looking for precious metal exposure at a discount have turned to platinum. This rotation has been visible both in physical investment products and ETF flows.
• Investment sentiment has improved. Platinum is increasingly seen as a diversification play — a “contrarian” precious metal with both industrial and monetary characteristics.

Risks:

• A global slowdown or weaker auto sales could quickly dampen demand.
• Accelerating EV adoption is a long-term structural headwind.
• A supply rebound or higher recycling rates could soften prices.
• Momentum and valuation risks remain after strong gains.

Insight:

In essence, platinum’s outperformance this year reflects a re-rating of scarcity rather than a new supercycle. It remains both precious and industrial — capable of swinging with either confidence or caution.

Uranium: The fuel behind the next nuclear push

Uranium often flies under the radar in commodity discussions, but it’s gaining relevance as nations re-embrace nuclear energy for decarbonisation, energy security, and baseload reliability. In 2025, uranium’s price and sentiment have both shown renewed strength.

Macro perspective:

• Global reactor demand is rising. The World Nuclear Association estimates uranium requirements could grow from ~68,900 tonnes in 2025 to over 150,000 tonnes by 2040 under aggressive build-out scenarios.
• The supply side is constrained. Uranium production currently covers only about 80–90% of demand, with deficits made up via inventories or secondary sources — buffers that are fading.
• Policy tailwinds are emerging. Governments in the U.S. and elsewhere are imposing import restrictions (e.g. banning Russian uranium) and supporting domestic mining or enrichment.

Risks:

• Nuclear projects have long lead times. Permitting, regulation, and construction delays are common.
• Price volatility is high. Uranium markets are relatively illiquid and sensitive to margin in/out flows.
• Secondary supply and decommissioned inventories still exert influence, particularly when primary output is tight.
• Geopolitical risk. Import restrictions, sanctions (e.g. U.S. ban on Russian LEU imports) and resource nationalism can dramatically rewire trade flows.
• Demand uncertainty. Cost inflation or public opposition can derail new nuclear initiatives in democracies.

Insight:

Uranium is re-emerging as a “strategic commodity” — leveraging its dual role in energy security and decarbonisation. For investors, it offers exposure to a long-duration supply squeeze, but it’s not for those who want fast liquidity or certainty.

Lithium, Battery Metals & Rare Earths: The engines behind the clean-tech revolution

Lithium, nickel, cobalt, graphite, and rare earths are no longer niche. They power the transition toward electrification, energy storage, and high-tech manufacturing. In 2025, these metals are under closer scrutiny than ever, both for their upside potential and their supply-chain fragilities.

Macro perspective:

• Explosive demand growth. The IEA reports that lithium demand grew nearly 30% in 2024, far outpacing its historical trend, driven largely by EVs, grid storage, and renewables.
• Supply concentration & refining risk. While mining is diversifying slowly, refining and processing remain heavily concentrated — especially in China.
• Policy & strategic drivers. Governments worldwide are designating these metals as critical, imposing export controls, tariffs, and investment incentives (e.g. the EU’s Critical Raw Materials Act).
• Technology shifts & battery innovation. Changes in battery chemistry (e.g. LFP, solid-state) and improvements in recycling can change metal intensity per battery, altering future demand curves.

Risks:

• Oversupply / price compression. In 2025, lithium prices slid to multi-year lows despite strong long-term demand because supply ramped up faster than consumption.
• Project delays and permitting challenges. Many new mines, especially in environmentally sensitive regions, face regulatory, social, and water-rights hurdles.
• Geopolitical & trade restrictions. China recently tightened rare earth export controls, which could reverberate through the global supply chain.
• Technological disruption. Battery chemistries that reduce reliance on critical metals may emerge, reducing future demand for certain elements.
• Recycling and secondary supply. As recycling improves, the share of new-feed demand could shrink — reducing dependency on mining.

Insight:

In the portfolio of metals, battery and rare-earth metals embody future optionality — they’re bets on clean energy, electrification, and tech sovereignty. But unlike copper, their path is exposed not only to macro cycles but to technological shifts, national security decisions, and refining chokepoints.

Accessing the theme: Instruments and considerations

Physically-backed ETFs

Offer straightforward exposure to spot prices.

• Advantages: transparent, liquid, low maintenance.
• Risks: storage and management costs; no yield; performance may diverge from spot prices due to fees or futures rolls.

Mining equities and ETFs

Provide leveraged participation through producers.

• Advantages: potential dividends and operational upside.
• Risks: company-specific, regulatory, and ESG risks often outweigh the pure commodity effect.

Explore Saxo’s Miners Shortlist, featuring both global mining stocks and ETFs — from precious metals and copper to uranium and battery & rare-earth producers — to see how these themes are reflected across listed instruments.

The balanced metals mindset

For investors, metals can play multiple roles:

• A growth proxy (copper, aluminium) when optimism returns.
• A hedge (gold, silver) when uncertainty dominates.
• A tactical diversifier (PGMs, tin, nickel) for those seeking exposure to specific innovations or policy shifts.

Yet discipline matters.
Metals are cyclical, sentiment-driven, and prone to exaggerated narratives — from “green shortages” to “AI super-cycles.” The truth lies in between: secular demand growth overlaid with cyclical volatility.

A balanced allocation approach, combining long-term thematic exposure with risk controls, remains the most sustainable way to engage.

Final thought

Metals have become more than commodities; they are the connective tissue of progress — shaping how economies electrify, digitise, and defend themselves.

Copper speaks of ambition, gold of caution, aluminium of transition, and platinum of adaptation.

In a world where uncertainty and innovation coexist, metals don’t just react to the global cycle — they define it.