News

Fears of an AI bubble, geopolitical tensions, sovereign debt, war and inflation: against a backdrop of numerous sources of uncertainty, real assets are increasingly coming into focus. “Over the medium term, metals offer attractive opportunities, supported by a resilient global economy and rising infrastructure spending,” says Thorsten Fischer, Managing Director and Head of Portfolio Management at Moventum AM.

In recent months, the gold price has undergone a significant correction after reaching a record high of just under USD 5,600 per troy ounce. The past quarter was also marked by considerable volatility: at one point, the precious metal was up by more than 15 per cent, before giving back much of those gains as real bond yields rose from the end of August onwards. Despite the losses in September, however, gold has stabilised above the USD 4,000 mark. “Following the exceptional rally at the beginning of the year, this consolidation is a healthy development,” says Fischer. In the short term, he expects a broadly neutral trend accompanied by elevated volatility. Persistently high geopolitical uncertainty remains a key factor, structurally driving capital towards safe-haven assets such as gold. However, the upside is being capped by sharply higher bond yields, which reduce the appeal of gold as a non-interest-bearing asset.

Looking ahead over the next twelve months, however, Fischer is optimistic: “The key factor is that central banks around the world continue to increase their gold holdings and remain committed to the gradual diversification away from the US dollar,” he explains. This is particularly true of many emerging-market central banks. Gold has consequently established itself as the second-largest reserve asset in the international monetary system. This structural demand trend is further underpinned by geopolitical and economic-policy uncertainty, as well as the continuing erosion in the value of fiat currencies as a result of expansionary fiscal policies and persistently high levels of government debt. “Over a twelve-month horizon, gold remains a strategic beneficiary of global uncertainty and the continuing trend towards de-dollarisation.”

The picture is similar for silver, as the metal is exposed to many of the same headwinds as gold. However, its correction has been considerably more severe: from a record high of around USD 120 per ounce at the end of January, the silver price had halved to approximately USD 60 by early October. The third quarter was also characterised by pronounced price swings. After rising significantly until the end of August, the metal subsequently surrendered much of its gains. “Silver is both a store of value and a hedge in times of crisis, but it is also an important industrial metal,” says Fischer. As a result, the silver price is influenced by a wide range of factors and is correspondingly more volatile than gold. “Over the medium term, the outlook remains constructive, as industrial demand continues to support prices,” Fischer says. This is compounded by a structural supply deficit: “Production can scarcely be increased at short notice.”

Palladium, which is used primarily in catalytic converters for motor vehicles, has experienced a veritable rollercoaster ride. After reaching a record high of just under USD 3,500 per ounce in 2022, the price fell to a little over USD 800 in August 2024. By the end of January this year, it had climbed back to almost USD 2,200, before falling again in September to around USD 1,200, bringing it close to its June low for the year. “Industrial demand from the automotive sector plays an even greater role here than it does for silver,” says Fischer. On the supply side, production is highly concentrated, making it vulnerable to disruption. “A large proportion of global production comes from Russia and South Africa,” Fischer explains. In the short term, volatility is likely to remain high, with no clear signs of a bottom having formed yet. “Over a twelve-month horizon, however, the fundamental picture is favourable,” says Fischer. In addition to the regional concentration of production, the long lead times required to develop new mines also constrain supply. At the same time, demand is likely to remain stable, as requirements from vehicle production remain high. Fischer concludes: “In our view, the current price level provides an attractive entry point, which is why we remain positively positioned.”

Copper is widely regarded as a barometer of the global economy, and it is currently pointing in the right direction. At the beginning of September, the industrial metal reached a new record high of just under USD 15,000 per tonne. Despite subsequent profit-taking, it is still up by around eight per cent over the quarter. “However, the rally was also driven by expectations of possible US tariffs, which tightened the available supply outside the United States,” Fischer explains. In the short term, trade-policy decisions are likely to generate further volatility. Over the next twelve months, however, the outlook is clearly positive. “Power grids, electric mobility and AI data centres are driving demand, while production can only be expanded slowly.” Fischer’s conclusion is that the gap between supply and demand is likely to widen further. “We therefore regard price setbacks as buying opportunities.”