Gold, silver prices shine; Copper, Zinc, other base metals join commodity supercycle

Gold and silver prices have witnessed a sharp rally amid heightened global uncertainties, with multiple factors driving safe-haven demand for precious metals. Alongside, base metals too have surged to record highs, supported by strong industrial demand and supply disruptions.

Global commodity markets appear to be in the midst of a cyclical upswing. Gold prices have gained over 55% year-to-date (YTD), driven by geopolitical tensions, trade disruptions, and a weaker US dollar. Central banks have remained steady buyers, while gold-backed ETFs recorded their highest monthly inflows in more than three years in September.

Silver prices have outperformed gold this year, with Comex silver prices rising about 70% YTD and MCX silver rates appreciating nearly 71%. MCX gold prices hit a lifetime high of ₹1,23,450 per 10 grams, while silver touched ₹1,50,282 per kg. Analysts expect further upside during the festive season, especially around Diwali.

“Commodity cycles unfold in three phases — energy first, then precious metals, followed by base metals. Energy prices spiked post-COVID, gold and silver prices doubled since August 2022, and now base metals are expected to gain 20–25% over the next two years, led by copper and zinc,” said Ajay Kedia, Director, Kedia Advisory.

Base Metals on a Strong Footing

Base metals have mirrored the bullish trend, with MCX copper prices touching a record ₹1,014.80 per kg, while MCX zinc hovered near ₹297.70 per kg. The surge is supported by tight global supply and robust demand from the electric vehicle (EV) and clean energy sectors.

Copper prices have surged on the back of global supply shortages and robust demand from the electric vehicle (EV) and clean energy sectors. Zinc and aluminium have followed suit, gaining around 6–9%, supported by shrinking inventories and disruptions in key producing regions.

“The metal price rally isn’t speculative—it reflects a structural mismatch. Mine output, particularly from Latin America and Africa, has lagged even as global infrastructure and green transition spending accelerates. In India, elevated metal prices are increasing input costs for downstream sectors such as automobiles, electricals, and construction,” said Jigar Trivedi, Senior Research Analyst, Reliance Securities.

While a stronger dollar or changes in interest rate expectations may trigger short-term corrections, the broader trend remains upward. “The market is increasingly pricing in long-term scarcity rather than short-term volatility. Traders, manufacturers, and policymakers must prepare for sustained high base metal prices,” Trivedi added.

Copper, often dubbed “Dr. Copper” for its ability to gauge economic health, is expected to remain a standout performer due to its vital role in electrification and renewable energy infrastructure. Zinc, aluminium, and lead are also likely to benefit as industrial activity expands globally.

Meanwhile, Trivedi expects MCX copper price to test ₹1,050 per kg in the near term, while MCX zinc price could reach ₹330 per kg, supported by a broadly bullish undertone.

The broader trend, experts say, points to a sustained commodity supercycle, with base metals poised to deliver strong returns backed by long-term structural demand.

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Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.