Quick overview

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Gold hit a new all-time high on Wednesday, while silver surged up to 5.3 percent to break the $90 per ounce mark for the first time. Among base metals, tin stood out with a gain of up to 6 percent at one point, and copper reached a record high before falling back.

Expectations for increased manufacturing demand, especially in emerging industries like artificial intelligence, are supporting many metals. The rally has been fueled by a speculative frenzy in China, where traders and wealthy investors are heavily investing in commodities such as copper, nickel, and lithium.

Trading volumes on the Shanghai Futures Exchange have increased significantly.

On Wednesday, the total open interest in all six of SHFE’s base metals hit a new record. This rally, especially in precious metals, has also been boosted by the so-called debasement trade, where investors avoid government bonds and currencies due to concerns over rising debt levels.

Commodities priced in dollars are attractive because of the relatively weak dollar. Last year, both gold and silver experienced their best annual performances since 1979, with gold increasing by 65% and silver nearly 150%. As global mines and smelters struggle to meet demand, base metals are generally benefiting from expectations of a tighter supply this year.

There were several notable disruptions in the copper market last year, including restrictions in China, the world’s largest aluminum producer, and a decline in tin exports from Indonesia, the second-largest supplier.