Global markets are being reshaped by a renewed appetite for base and precious metals, with the MSCI Metals & Mining index up roughly 90% since the start of 2025 and handily outperforming semiconductors, global banks and the US tech giants. The rally shows little sign of cooling as demand from robotics, electric vehicles and hyperscale AI data centres pushes prices to fresh highs and refocuses investor attention on raw-material supply chains.
Copper stands at the centre of this story. Industry forecasts now expect the red metal to remain in structural deficit through the year, and some market watchers warn the shortfall could deepen versus 2025. The squeeze reflects a simple arithmetic: rapidly growing demand for electrification and computing infrastructure meets a mining sector still constrained by underinvestment, long permit lead times and frequent geological and geopolitical bottlenecks.
The demand drivers are diverse but mutually reinforcing. Electric vehicles and grid upgrades consume vast quantities of copper and other conductive metals; industrial robotics and automation add specialty alloys and rare metals; and AI data centres require dense electrical and cooling infrastructure that amplifies materials intensity per rack. Together these three trends accelerate metal intensity across multiple sectors, raising the marginal consumption curve for copper, nickel and related commodities.
On the supply side, extraction and processing have not kept pace. Years of low prices before the current upswing restrained capital expenditure in the mining industry, while environmental, social and governance (ESG) requirements and permitting delays further slow new projects. Major producing countries face their own risks — from labour disputes and water constraints in South America to downstream processing bottlenecks in Asia — making quick supply responses improbable.
Precious metals are rallying alongside industrial metals. Analysts cited in Chinese media see gold probing the $5,000-per-ounce mark, and Goldman Sachs has raised its end-2026 target to $5,400 from $4,900. The move reflects a confluence of factors: safe-haven demand amid geopolitical uncertainties, lingering inflation concerns, and portfolio rebalancing as commodities become a focal point for investors hunting real-asset exposure.
The market consequences are wide-ranging. Mining equities and commodity exporters stand to benefit, while manufacturers and end-users will face higher input costs that could feed through to inflation or spur substitution and recycling. For policymakers, the metals surge renews pressure to secure supply chains, speed permitting for critical mines and invest in recycling and processing capacity to reduce strategic vulnerabilities.
For global investors and corporates the window for adjustment is narrow. Scaling supply takes years, so shortfalls in copper and other strategic metals are likely to persist unless there is a marked shift in capital allocation or a rapid adoption of alternative technologies. The metals rally is thus not just a cyclical reflation play; it is a structural signal that the energy transition and the AI revolution are materially reshaping commodity markets.