Commodities weekly: Metals take the lead as index hits three-year high

Sector performance: metals in command, energy the lone laggard

Precious metals:
Gold, silver and platinum once again outperformed. Gold rose around 2.6% on the week as softer yields and a weaker dollar aligned with strong longer-term allocation flows from central banks and institutional investors. Silver and platinum jumped more than 8%, extending what has been an exceptional year for these two metals, both outperforming gold despite the lack of tailwind from central bank demand. Overall the BCOM precious metals index which only includes gold and silver has returned almost 64% in 2025. 

Industrial metals:
Industrial metals posted another constructive week. Copper rose nearly 2%, with aluminium and nickel also firmer. The sector index gained around 1.9%, a year-to-date increase of 13%, supported by a tightening supply backdrop and strong demand from electrification, grid upgrades and data-centre construction.

Agriculture:
The agriculture rose 1.2% on the week, supporting a modest year-to-date gain of 2.9%, with broad strength across grains and softs offsetting losses across livestock. Wheat found modest support after last week’s weakness, while soybeans and meal edged higher. Sugar and cotton were also positive. Cocoa was the main laggard, continuing its post-spike normalisation after the extreme tightness seen earlier this year.

Energy:
Energy was the outlier with a small 1% weekly loss increasing the year-to-date deficit to 2.6%. The sector slipped slightly, primarily due to sharp losses in diesel, while Brent and WTI were essentially flat, showing little appetite to break out of the tight ranges that have held through much of the past months.

Precious metals: a combined monetary, industrial and policy-driven bid

Gold continues to behave like a stabilising asset as macro uncertainty and debt concerns rise. The combination of lower real yields, a softer dollar and the broader “debasement hedge” angle added support. Pullbacks remain shallow, with long-term investors and central banks using dips as entry points. In addition, a major new structural driver for gold demand is the stablecoin sector, led by Tether (USDT issuer). Tether has within a very short time become one of the world's largest holders of physical gold outside of central banks, with reserves reaching approximately 116 metric tons (as of Q3 2025). This accumulation is significant enough to influence market dynamics, with Tether's Q3 purchases accounting for an estimated 2% of total global demand and over 12% of total central bank buying during that period. The buying is driven by the need to back both its primary stablecoin reserves (diversifying away from pure US Dollar assets) and its gold-backed token, XAU₮, cementing a strong, sustained link between the crypto world and physical gold markets.

Silver traded just below USD 54.50, a level that has capped two previous rallies, after fully retracing October’s 16% correction slump, amid ongoing demand strength, increasingly driven by its physical market. Exchange-monitored stocks in China have dropped to a decade low after a series of shipments were redirected to London to plug a local shortfall. Industrial demand—especially from solar, electronics and EV-related components—remains firm.

Another layer is policy risk. Silver’s inclusion on the US critical minerals list has fuelled speculation that the US may revisit tariff plans next year. This has throughout the year encouraged strong flows into the US, with COMEX‑monitored inventories reaching 458 million troy ounces, even after recent shipments to ease tightness in the London spot market.

Platinum’s rally accelerated after China launched new futures contracts in platinum and palladium aimed at both institutional and retail investors. The additional financialisation of the market comes at a time when supply remains constrained. The resulting influx of speculative and hedging activity has tightened the physical balance and added upward momentum. These flows also highlight the growing influence of China’s retail investor base, which has been an important engine in recent months driving demand for gold and silver, and potentially now also the PGM markets.

Industrial metals: copper in demand as deficit forecasts converge

Copper remains the centre of gravity within the industrial complex, with the market increasingly viewing 2025–2026 as the transition into a sustained deficit period. Mercuria became the latest major trading house to project a 500,000-tonne shortfall by 2026, aligning with a broader shift among producers and banks from surplus to deficit expectations. The drivers are clear: ongoing disruptions at major mines—including recent setbacks in Indonesia that may have lasting supply implications—continue to challenge miners’ ability to supply. At the same time, structural demand remains firm, led by electrification, EV build-out, renewable generation and, more recently, the accelerating expansion of AI-related power infrastructure and data centres.

Copper miners, smelters and traders met in Shanghai this week amid growing concern over mine-level disruptions. Premiums for refined copper offered to Chinese buyers from Chile's Codelco rose to a record, a clear indication that local physical availability is tightening. Given China’s role as the world’s largest consumer, this shift carries global price implications.

While total exchange-monitored copper stockpiles in New York, London and Shanghai hit a seven-year high this week (636 kt—on paper, a bearish signal), the geographical split tells a different story. A record 60% of all visible exchange-monitored inventory is now concentrated in US warehouses, despite the US only accounting for roughly 6% of global demand. This flow is being driven by speculation that the US government may revisit import tariffs next year. 

This concentration tightens availability elsewhere and, in practice, removes inventory from the global pool—typically a precursor to firmer forward spreads and a more supportive price environment. Combined with supply disruptions, and as long as the US remains a magnet for surplus metal, global tightness is likely to persist into 2026, even before the deeper structural deficit fully materialises.

Energy: diesel bulls retrace while crude struggles —sowing the seeds of the next cycle

The energy sector was the only area to post losses this week. Diesel was the standout mover, reversing sharply amid speculation that a potential US-brokered Ukraine peace framework could ease or eventually dilute sanctions on Russian exports. Russia is the world’s second-largest diesel supplier, and even a partial restoration of flows would weigh on global balances.

Brent and WTI were broadly unchanged, continuing a multi-week pattern of tight, directionless trading. Both benchmarks are on track for a fourth but relatively small consecutive monthly decline, reflecting ample near-term supply following successive OPEC+ production hikes, and resilient non-OPEC output, especially from the Americas, most notably Brazil, Canada and Guyana. 

While this weakness dominates the headlines, the medium-term picture is becoming more interesting. Our view remains that crude in the mid-50s to low-60s, as forecast by major analyst houses in the coming month, is not sufficient to sustain the level of upstream investment required to meet future demand and offset natural decline rates of 6–8 million barrels per day annually. With that in mind we see a prolonged period of price weakness sowing the seeds for a future rally as prices align with levels that is needed to ensure future supply to an increasingly energy hungry world.