Prices & Review

Overview (October 2025)

Base metals seem to be split into two camps: copper, aluminum, zinc and tin continuing to trend higher in October, while nickel and lead remained entrenched in sideways trends. Early in the month, precious metals extended their rally, with silver setting a fresh high above $50 per oz for the first time in 45 years. However, by month’s end, all the precious metals ran into profit-taking, with gold prices retreating 11.3 percent from the high at one stage.

The US Government shutdown means there is little fresh data on the state of the US economy. Current warnings suggest that most of the US GDP growth is likely to be due to the investment surge in artificial intelligence and other high-tech industries. A correction in the AI sector could therefore have spillover effects across broader markets. A major downside risk for base and precious metals would be a correction in US equity markets, prompting investors to liquidate positions in other markets to meet margin calls.

The IMF at its annual meeting in October, lifted its forecast for global growth by 0.2 percent to 3.2 percent this year, before falling to 3.1 percent in 2026. It expects China to grow by 4.8 percent this year, falling to 4.2 percent in 2026, with US growth of 2 percent this year, rising to 2.1 percent in 2026 and Euro area growth of 1.2 percent this year, easing to 1.1 percent growth next year.

While China’s economy has slowed – burdened by deflation and a weak property market – markets found come encouragement in the Communist Party’s fourth plenum meeting, where plans for the 15th five-year plan were discussed. According to state media, China will pursue policies aimed at increasing “economic strength, scientific and technological capability, national defence capacity, overall national power and international influence”. The inclusion of “international influence” supports the view that a new world order is taking shape, one that could have long-term implications for the US dollar, sovereign debt, gold, geopolitics and supply chains in general.

US CPI data for September, out on October 24, showed inflation running at 0.2 percent, month-on-month, which was down from 0.3 percent in August. This better-than-expected number is likely to increase the market’s expectation for further US rate cuts. Lower yields should, in turn, provide some support for gold, though the metal continues to be influenced by a range of other factors.

The trend of de-dollarisation is also likely to be a long-term headwind for the US dollar, especially as China steps up its overseas lending. External RMB loans, deposits and bond investments by Chinese banks quadrupled to more than $480 billion over the past five years, according to the Financial Times.

As has been the case for most of the year, markets continue to face multiple crosscurrents, with macro-economic, fiscal, monetary and geopolitical issues all shaping overall sentiment. At the same time, key fundamental developments are likely to see individual metals follow their own paths more in the months ahead. News of a potential US/China trade deal emerged in late October – this lead to a surge in US equities to new all-time highs, which also led to further gains in most of the base metals, with copper prices getting within $10.50 per tonne of its all-time high, set on 20 May 2024.