FICC

Commodity market breadth would need to improve for it to signal bullish conditions for the aggregate commodity complex. We maintain a defensive tilt within commodities, favoring precious metals over the more cyclically sensitive energy and industrial metals.

We remain cyclically short Brent but are tightening the stop loss to $73/bbl to guard against a geopolitics-driven upside break.

Silver, platinum, and palladium may ride the same cyclical tailwinds as gold in the coming months. However, four key risks threaten their relative performance versus the yellow metal.

Renewables’ role in power-hungry data centers is overstated. Natural gas will fill clean electricity’s data center supply shortfall, particularly in the US and Europe.

Special Report

The fact that the yellow metal’s rally has defied headwinds from key cyclical drivers suggests that the bull market is structural, not cyclical. Buy gold and gold mining stocks in absolute and relative terms.

Copper’s unwind – triggered by the refined metal’s US tariff exemption – isn’t over yet. We remain short the red metal on an absolute basis and relative to gold.

U.S. copper tariffs will redirect the metal’s trade flows from the US to the rest of the world, replenishing depleted inventories abroad. With global copper demand set to soften in H2, the red metal will likely face downward price pressure outside the US. Stay long gold / short LME copper, and initiate an outright LME copper short.

An update on the key themes and views that will shape commodity markets through the remainder of 2025.

The escalating Israel-Iran conflict has boosted oil prices. We are positioning for further geopolitical escalation, uncertainty, and the economic fallout through two strategies that benefit from both near- and long-term upside.

Investors should hold gold, build up some cash, tactically overweight US equities relative to global, and prepare for at least minor oil supply shocks – possibly major shocks – as the Israel-Iran war escalates.