Gold, silver, and copper all reached new record-highs last week. Copper is up 36% from a year ago, gold has gained 72%, and silver has risen 187%.
Two factors driving the rally are supply shortages and increasing industrial demand. These metals are critical inputs for data centers, power grids, and electric vehicles, and demand is accelerating across all three sectors simultaneously.
Copper is particularly important for electric vehicles. A typical EV contains roughly 4x more copper than a conventional car, and EV demand is projected to triple by 2035.
Geopolitical uncertainty is also spiking prices. Protests in Iran have continued, with reports of significant casualties. Just a few weeks ago, President Trump ordered the capture of Venezuela’s president, Nicolás Maduro. Meanwhile, tensions remain high with European allies over Trump’s push to acquire Greenland.
Previous periods of geopolitical instability have been good for gold, the hallmark safe-haven asset. Fear and uncertainty typically drag stocks down in the short term.
But over longer periods, markets are surprisingly resilient. One JP Morgan study of 40 armed conflicts and terrorist attacks found that in the 12 months after the event, S&P 500 returns were not statistically different from peacetime.
A different analysis found that the S&P 500 actually performed better in the 12 months after conflicts, returning 15% on average — higher than the index’s average annual return of 10%.
The bottom line: It may be tempting to sell when conflict breaks out and it looks like the world might end, but — chances are it won’t, and you likely shouldn’t.
Bitcoin’s doomsday case keeps getting tested, and it flops. Bitcoin is supposed to be digital gold, a hedge against apocalypse in any form. When Russia invaded Ukraine, everyone waited for bitcoin to rally. Didn’t happen.
Now we’re at what Jamie Dimon calls the most unstable time since World War II. Gold, silver, copper, tin, lithium, and platinum are all ripping to record highs. Bitcoin? Down 1% on the year and 21% over the past six months.