Precious metals such as gold and silver, rare earth minerals, and industrial metals such as copper have been making headlines in recent months. We talked to a team of experts to discover what’s been driving investors’ appetite.
Read this article to understand:
- Why gold remains special among metals
- How mining companies can help diversify exposure
- The long-term trends driving industrial metals
Even before the start of the war on Iran, metals were having a bull run. Gold, silver, aluminium and copper, along with other critical minerals and rare earths were in the news as demand seemed insatiable and countries forged ahead to secure supply chains.
Each metal has its own idiosyncratic drivers, though all currently seem to fall under the themes of fragmentation, the energy transition and electrification, and rising geopolitical risk, summed up by Canada’s Prime Minister Mark Carney in his speech at Davos on January 20, 2026.1
But the investment case for gold is different from the rest. While there may be periods of profit-taking, as seen in late March 2026, the overall bull run in gold can be traced back to 2022, and the metal continues to be seen as a geopolitical hedge (see Figure 1).
Figure 1: Price of gold, April 2021 to April 2026 (USD/ounce)
Past performance is not a reliable indicator of future returns.
Source: Aviva Investors, Macrobond. Data as of April 15, 2026.
Meanwhile, industrial metals blend cyclical and structural themes to varying degrees. The downstream metals more exposed to cyclical forces, such as steel, could see demand and prices fall further if war dragged on in the Middle East and drove lasting inflation, recessions and higher interest rates. Among these cyclical metals, copper is needed to build the infrastructure for AI and electrification, and therefore benefits from strong long-term drivers.
These trends are bolstered by nations’ reduced tolerance for global dependencies. The US, as well as other developed countries, have made supply a matter of strategic importance, especially for rare earths, given China’s near monopoly on processing capacity (see box-out: The special case of rare earths).2
We’ve spoken to experts across our teams to examine the risks and opportunities of investing in various metals in credit, equity, and multi-asset portfolios.
Gold: The volatile universal hedge
For many investors, gold is viewed as an “everything hedge”, says Max Burns, head of equity research at Aviva Investors. Of course, short-term gold prices are very macro-driven, unpredictable and sometimes volatile, as seen in late March 2026 (see Figure 1).3
But gold remains special, even among precious metals.
“Despite its high price and good past performance, we think it should continue to have long-term positive returns,” says David Nowakowski, multi-asset & macro strategist at Aviva Investors. “Overall economic activity is still decent but, more importantly, people want that diversification benefit other safe-haven assets don’t always provide.”
In terms of hedging, although it hasn’t always been the case, gold has at times provided diversification when even US treasuries have not – not just in 2026, but also in 2022, for example.4 This is what many investors are looking for today.
From a structural perspective, Nowakowski says central-bank buying is the most important change. This has grown since Russia’s full invasion of Ukraine in 2022, as countries look to protect their reserves from sanctions, although western central banks continue to hold much more gold than emerging markets (the UK is an outlier, having sold most of its gold between 1999 and 2002).5
“From already high levels, central banks are continuing to increase their holdings by about five to eight per cent a year,” says Nowakowski. “In a mirror image of the 1990s and 2000s, when central banks were selling gold, this is an important structural pillar, as supply is slow and inelastic.”
Combined with retail and institutional demand at the margins, and given how hard it is to increase the gold supply, this explains the price movements of recent months – including gold’s poor performance in early 2026, when surprisingly, Turkey and Russia sold some of their gold reserves, while more speculative investors took profit and reduced risk. “This should be a temporary phenomenon,” says Nowakowski.
Mining the opportunity
Investors looking to allocate to gold can buy it physically or invest through commodity markets or gold-backed ETFs. More indirectly, they can also buy shares or bonds of mining companies.
Miners require cash to build out and run their operations, which creates investment opportunities through public markets. While it is possible to invest in specialised gold miners, however, the market is much smaller than for industrial metals. Only around 3,000 metric tonnes of gold are mined each year, compared to over 20 million tonnes of copper and more than three billion tonnes of iron ore.6
“From a public credit point of view, we get many more opportunities to fund mining in basic metals than precious ones, which are smaller operations and therefore don’t require as much funding,” says Florent Vallespir, senior credit research analyst at Aviva Investors.
He adds that investing in larger basic metal mining companies also gives indirect exposure to gold and silver, which are often found as byproducts of the main metal being mined, such as copper or iron ore.
“When gold or silver prices go up, the miners make a bigger profit on their sale, reducing their overall cost base and supporting performance,” he explains.
Positioning in larger firms also gives investors exposure to other metals, which can help diversify their portfolios.
Silver, platinum and palladium: The other precious metals
Other precious metals like platinum, palladium, and silver are crossovers of a sort. Their prices can vary because of supply and demand dynamics, like other industrial metals, but in recent months, they have somewhat ridden the coattails of gold’s performance.
“Financial markets are much larger than commodity volumes or even total values, so shifts in retail and institutional demand can lead to bubbles; this is what happened to silver recently,” Nowakowski explains.
But price rises in these metals can also benefit the larger mining companies. Vallespir gives the example of BHP, which recently announced a contract with Wheaton Precious Metals over its Antamina mine in Peru. BHP will sell Wheaton an agreed share of the mine’s silver byproduct against an upfront payment of $4.3 billion.7
“Even for a company as large as BHP, $4 billion is a nice cash inflow,” he says.8
Industrial metals: The workhorses of electrification
Industrial metals, particularly copper, nickel and aluminium, are driven by different factors, the key structural theme being electrification.
The energy transition is boosting demand for clean electricity and its components, as well as electric vehicles, in China and Europe, and even in the US, despite a less favourable investment climate.
But there is also a huge need for additional energy, first in emerging markets, to give more people access to electricity, and secondly through the boom in artificial intelligence and data centres.
“AI capex investment is one of our themes,” says Nowakowski. “It’s a huge additional source of electricity demand that probably wasn’t planned for two years ago.”
Added to that is the need for large investments in expanding and modernising power grids in developed countries, some of which have endured years of underinvestment.
“Industrial metals are tied to the theme of increased global electrification, which is embedded in our portfolios across the equity platform,” says Burns.
The rationale is similar in investment-grade credit, and Vallespir says he favours the large mining companies as a way to invest in the electrification theme.
“Playing the consolidation of mines can also create synergies, so we are monitoring those opportunities,” he adds.
Indeed, electrification will require vast amounts of copper, silver, nickel, zinc and, as a partial replacement in batteries, aluminium, as well as critical minerals and rare earths. These tend to be price-sensitive, and supply could be bolstered through both new supply and improvements in recycling. But we believe the structural factors are supportive for the next few years.
“And while resource nationalism has mainly applied to industrial metals, critical minerals and rare earths, we have seen export controls on nickel and silver and regulatory changes lifting prices,” says Nowakowski.
Tariffs have also created shortages in some jurisdictions. That means global inventories are still insufficient, and there is scope for countries to build them up.
Aluminium is a special case: it is very energy-intensive to produce from bauxite and alumina, and the rise in electricity prices (in part from data centre demand), along with China’s production caps, has resulted in constrained supply. The Iran war further disrupted a key source of global output, and prices have been on a tear.9
Investment risks
One of the key risks in the current environment is potential difficulties in the supply chain, adds Vallespir. “If you were buying a lot of commodities in the Middle East, the logistics could get complicated,” he says.
While restricted supply could push prices higher, unmet orders could hurt suppliers and have repercussions further down the value chain.
In addition, if events led to an industrial downturn or a recession, the outlook for industrial metals would be more at risk, whereas gold could benefit.
“Just because industrial metals and gold currently line up doesn’t mean they won’t diverge later. That’s important to monitor,” says Nowakowski.
He adds that higher electricity prices or more general difficulties in power supply were also a key factor in making services inflation sticky in many places after 2022. If energy prices remain high for longer in the current situation, it could once again lead to persistent inflation, lower growth and possibly higher interest rates.
“It’s one of those sector-specific themes that has macroeconomic implications,” he says. “If it’s longer lasting, it could be harder to deal with.”
The special case of rare earths
Rare earths are in fact not so rare, explains Nowakowski, but their extraction and processing are difficult, costly, and polluting. As a result, most western countries have increasingly outsourced supply to China, which now controls around 65 per cent of mining and 90 per cent of processing.10
The country’s government support, technological progress, lower costs and less demanding environmental requirements make it hard for others to compete.
“China is now a monopoly power,” says Nowkowski. “If a company elsewhere wanted to produce a rare earth today, not only would it come up against high costs and stringent environmental regulations, but China would also be able to flood the market and bankrupt the upstart competitor.”
Rebuilding capacity in other countries would therefore require industrial policy and state support, and would still take several years to achieve. This is being put in place gradually, says Vallespir. It was one of the goals of the Inflation Reduction Act in the US and continues to be an aim of the Trump administration, while the EU set up a Critical Raw Materials Act to the same ends in 2023.11,12 Their efforts combine onshoring and friend-shoring, although some countries with rich deposits present risks of their own.
“You might be moving some country risk from China to other countries,” says Vallespir. “The end result may not leave you much better off.”
Many rare earths are also byproducts of other mining operations, and direct investment opportunities tend to be small.
“Not throwing away the tailings is important,” says Nowakowski. “But again, the main investment opportunity remains through the resource and mining companies.”
Conclusion
The current geopolitical situation is creating a particularly uncertain environment. Gold can be seen as a haven for value or a volatile investment. And industrial metals are supported by electrification and the AI boom but could be hampered by stagflation.
“There is a lot of rotation at the moment,” says Burns. “Investors should look through the noise and to the rational, long-term trends.”
References
- “Davos 2026: Special address by Mark Carney, Prime Minister of Canada”, World Economic Forum, January 20, 2026.
- “America’s dangerous pursuit of critical-mineral dominance”, The Economist, February 26, 2026.
- Buttonwood, “After Iran, gold is looking less glittery”, The Economist, March 30, 2026.
- Roderick Molenaar et al., “Empirical evidence on the stock–bond correlation”, Financial Analysts Journal, February 7, 2024.
- Gian Maria Milesi-Ferretti, “How important are central bank holdings of gold?”, Brookings, February 2, 2026.
- Govind Bhutada, “All the metals we mine each year, in one visualization”, World Economic Forum and Visual Capitalist, October 14, 2021.
- “BHP enters into a silver streaming agreement with Wheaton Precious Metals relating to its share of Antamina silver production”, BHP, February 17, 2026.
- The company mentioned is for illustrative purposes only and is not an investment recommendation.
- Past performance is not a guarantee of future returns.
- Industry & Policy Thematics, “Securing rare earth supply”, J.P. Morgan, February 19, 2026.
- “2026 Critical Minerals Ministerial”, US Department of State, February 4, 2026.
- “European Critical Raw Materials Act”, European Commission, March 16, 2023.
