Gold again above US$4,600, copper hits record high

Tashkent, Uzbekistan (UzDaily.uz) — The metals market looks stronger toward the end of August than it did just a couple of weeks ago. Precious metals are being supported by a weaker dollar, concerns over US debt and expectations for new signals from the Federal Reserve. Industrial metals are following a different logic, with physical supply shortages, low inventories and shifts in trade flows playing a more important role than macroeconomic factors.

Gold is trading at around US$4,630–4,650 an ounce, close to its three-month highs. Silver is holding at around US$68–69 an ounce and also remains near the strong levels seen in recent weeks. After a period of pressure, investors have returned to safe-haven assets as markets react nervously to the US debt situation, movements in yields and possible government intervention in the debt market. Gold is no longer seen solely as protection against geopolitical risks; it is increasingly viewed as insurance against broader macroeconomic risks.

However, it is still too early to speak of a calm upward trend. US inflation remains the focus, with investors awaiting the PCE index, which the Federal Reserve uses as one of its main indicators of price pressures. If the data come in softer, gold and silver could continue to rise. If inflation appears persistent, markets could quickly return to expectations of tighter Federal Reserve policy. Precious metals are therefore trading at high levels, but their further direction remains dependent on the dollar, yields and signals from the US central bank.

Platinum and palladium have also recovered alongside overall demand for precious metals. Platinum is trading at around US$1,860–1,900 an ounce, while palladium is around US$1,330–1,360 an ounce. At the same time, the picture differs considerably within the group. Platinum looks more resilient due to expectations of a supply deficit and demand from hybrid vehicles, where platinum-group metals are still required for catalytic systems. Palladium is weaker: over the longer term, it continues to face pressure from the growing share of electric vehicles and the gradual replacement of palladium with platinum in automotive catalysts.

Copper remains the main story in the industrial metals segment. Prices have risen above US$6.7 per pound and reached a record high. Formally, demand for the metal is supported by familiar long-term factors such as the energy transition, data-centre construction, artificial intelligence development and electricity-grid modernization. But another powerful factor has now been added: expectations of possible US import tariffs. Traders are actively moving metal to the US market, reducing available inventories in other regions. As a result, a market that previously could have appeared balanced is once again being viewed as tight.

Zinc has become another clear example of how quickly the market responds to shortages. Prices rose to nearly US$3,860 per tonne, the highest level in four years. Low warehouse inventories, production disruptions and market caution following the previous tightening of supply are supporting the metal. Chinese exports have eased conditions for buyers somewhat, but have not fully resolved the problem: available metal remains limited, while any news of disruptions at mines or plants quickly brings buyers back into the market.

Aluminium is trading at around US$3,240 per tonne and looks calmer than copper and zinc, but its fundamental picture also remains tight. The metal has risen by almost 23% over the past year, while LME warehouse inventories previously fell to their lowest level in 36 years. This indicates that the physical market remains tight: supply could formally recover through the restart of production capacity, but the process will not be quick. The structure of inventories adds another complication, as a significant share consists of metal that not all buyers are willing to take.

Overall, the metals market is now again divided into two broad stories. Precious metals depend on inflation, the dollar, yields and Federal Reserve rhetoric. Industrial metals are increasingly supported by actual shortages, low inventories and long-term demand from the energy, infrastructure and technology sectors. Therefore, even if macroeconomic conditions periodically weigh on commodities, copper, zinc and aluminium remain the segment where fundamental support appears most pronounced.

Anna Bodrova,
Alpari Analyst