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Portfolio construction

We are in a major demand cycle for strategic metals

May 29, 2026 - 4 min

In this environment, gold is likely to remain key in strategic asset allocation.

How is the rise in resource nationalism impacting the demand for strategic metals?

The world is shifting from globalization toward nationalism. Countries increasingly want domestic production capacity at home. Strategic sectors such as defense, data centers, robotics, renewables, EVs, are more and more capital intensive. Demand for strategic metals is therefore increasing. Similar to oil reserve policies in the '70s, countries are beginning to build reserve of strategic resources and materials.

Where are we currently in the commodities cycle?

We are currently in the middle of the commodity cycle. Those cycles tend to be driven by capital investment. Between 2010 and 2020, mining companies underinvested due to a low commodity price environment. But since COVID, we are in a major demand cycle, supported by electrification, renewables, EVs, data centers, and so on. Higher prices should encourage new supply. However, meaningful additional production is unlikely before 2030.

Are you seeing any pockets of mispriced scarcity?

Copper is essential across major growth sectors, be it power grids, data centers, defense, electric vehicles, robotics, and so on. A structural supply deficit is emerging in the copper space. Investment remains insufficient despite higher prices. Tin is another good example. It is essential for the technology sector, especially for solder in the semiconductor industry. But companies are investing only half of what is needed to meet future demand.

Beyond inflation and geopolitics, what is gold’s true strategic value in today’s market?

Gold is not a perfect hedge, but remains a strong portfolio diversifier. It has low correlation with equities and bonds. It carries no counterparty risk. The debt burden and the interest payments on it are expected to continue to rise. In addition, defense spending is increasing at a fast pace. As a result, deficits are likely to deteriorate and debt should continue to keep rising in the low growth environment. Debt to GDP will most likely continue to rise and become less and less sustainable over time. In this environment, gold is likely to remain key in strategic asset allocation.

What disruptive force could lead to a pivotal shift in commodity markets?

The current conflict highlights our dependence on fossil fuels and imports coming from the Middle East.

These geopolitics are likely to accelerate electrification and renewable energy investment. Thermal vehicles consume around 25 million barrels per day. Higher oil prices will likely push demand for EV cars going forward. Countries are increasingly supporting domestic energy production, be it with solar, wind, or nuclear. The shift supports long-term demand for strategic metals such as copper, aluminum, tin, and zinc.

In this environment, gold is likely to remain key in strategic asset allocation.

How is the rise in resource nationalism impacting the demand for strategic metals?

The world is shifting from globalization toward nationalism. Countries increasingly want domestic production capacity at home. Strategic sectors, such as defense, data centers, robotics, renewables, and EVs, are more and more capital intensive. Demand for strategic metals is therefore increasing. Similar to oil reserve policies in the "[1970s]", countries are beginning to build reserve of strategic resources and materials.

Where are we currently in the commodities cycle?

We are currently in the middle of the commodity cycle. Those cycles tend to be driven by capital investment. Between 2010 and 2020, mining companies underinvested due to a low commodity price environment. But since Covid, we are in a major demand cycle, supported by electrification, renewables, EVs, data centers, and so on. Higher prices should encourage new supply; however, meaningful additional production is unlikely before 2030.

Are you seeing any pockets of mispriced scarcity?

Copper is essential across major growth sectors, be it power grids, data centers, defense, electric vehicles, robotics, and so on. A structural supply deficit is emerging in the copper space. Investment remains insufficient despite higher prices. Tin is another good example. It is essential for the technology sector, especially for solder in the semiconductor industry. But companies are investing only half of what is needed to meet future demand.

Beyond inflation and geopolitics, what is gold’s true strategic value in today’s market?

Gold is not a perfect hedge but remains a strong portfolio diversifier. It has low correlation with equities and bonds. It carries no counterparty risk. The debt burden and the interest payments on it are expected to continue to rise. In addition, defense spending is increasing at a fast pace. As a result, deficits are likely to deteriorate, and debt should continue to keep rising in the low-growth environment. Debt to GDP will most likely continue to rise and become less and less sustainable over time. In this environment, gold is likely to remain key in strategic asset allocation.

What disruptive force could lead to a pivotal shift in commodity markets?

The current conflict highlights our dependence on fossil fuels and imports coming from the Middle East.

These geopolitics are likely to accelerate electrification and renewable-energy investment. Thermal vehicles consume around 25 million barrels per day. Higher oil prices will likely push demand for EV cars going forward. Countries are increasingly supporting domestic energy production, be it with solar, wind, or nuclear. The shift supports long-term demand for strategic metals such as copper, aluminium, tin, and zinc.