The global metals market has kicked off 2025 with some strong gains, buoyed by geopolitical uncertainties.
Copper has surged more than five per cent over the past month and was trading at $US4.37 per pound (lb) at last close. Prices sat at $US4.03/lb on December 31, demonstrating the commodity’s rapid gains.
“Copper shorts in New York have been squeezed, adding support to a rally,” Saxo Bank’s head of commodity strategy Ole Hansen said.
“Traders are also looking for an improved demand outlook in China after an end-of-year stimulus blitz and export boom –some of it probably related to front-loading orders ahead of tariffs – helped turbocharge growth in the final quarter to the strongest level in six quarters.”
Traditionally seen as safe-haven assets, gold and silver have also rallied despite headwinds from a stronger US dollar.
Gold, which broke its recent downtrend, rose 3.8 per cent from $US2616 per ounce (oz) on December 20 to $US2715/oz on January 17.
Silver followed suit, scaling $US30/oz after trading below the mark for the best part of a month, with Hansen attributing these movements to fears over geopolitical risks.
“Trump tariffs may disrupt and potentially uproot normal trading dynamics,” Hansen said.
The electrification trend and green energy transitions are also influencing market dynamics, shifting investor focus on key industrial metals.
“China’s response could lead to stronger domestic demand for raw materials, most likely supporting those (commodities) benefiting from the electrification process,” Hansen said.
The metals rally reflects broader speculative activity, with hedge funds and other investors lifting their net-long positions to a 17-month high.
With geopolitical developments and US policies under close scrutiny, metals remain central to the 2025 commodities narrative.
Saxo is bullish, believing gold could reach $US2900/oz and copper $US4.80/oz this year.
“Multiple uncertainties will create a challenging environment, but the structural demand for key metals remains intact,” Hansen said.
Subscribe to Australian Resources & Investment and receive the latest news on commodity prices, resource developments, executive movements and more.