Goldman Sachs predicts increased volatility in critical metals like silver, copper, platinum, and palladium due to ongoing trade war uncertainties and tariffs. Analyst Daan Struyven noted that tariffs may pull metal inventories into the US, tightening ex-US supply and creating potential for price swings similar to those seen in 2025 and early 2026.
Heightened volatility in critical metals like copper and silver can impact manufacturing costs for companies reliant on these materials and create trading opportunities and risks for investors, particularly as geopolitical tensions influence supply chains.
Goldman Sachs anticipates further price volatility in key metals such as silver, copper, platinum, and palladium, driven by ongoing trade disputes and the implementation of tariffs. Daan Struyven, co-head of global commodities research at the bank, stated in a note to investors that tariffs are unlikely to stimulate new critical mineral supply due to the long lead times for mine and smelter construction. However, he suggested that tariffs can serve a national security objective by drawing metal inventories into the US without requiring significant government expenditure.
Struyven observed that trade tensions have led to reduced liquidity in markets outside the US. He warned that even with high global stockpiles, metals could experience extreme price fluctuations if a sudden buying spree occurs as countries attempt to hoard supply. The focus in metal markets has shifted from gold, which saw a significant rally last year, to metals like silver, copper, and platinum. This shift has already triggered sharp price increases outside the US, including a short squeeze that propelled silver prices in London to a 45-year high.
Given the persistent trade uncertainty, similar market scenarios are expected to unfold. Struyven indicated that while investor demand has moderated as markets price in potential Federal Reserve rate hikes, a substantial portion of the metal drawn into the US may remain there. This could result in tight available inventories outside the US, creating conditions for a repeat of the volatility seen in the latter half of 2025 and early 2026 should investor demand rebound.
Copper is identified as particularly susceptible to significant price swings in the near future. Struyven highlighted the metal's importance in the buildout of AI infrastructure and recent concerns about a potential shortage, with demand projected to outstrip supply for the next decade. He also noted that even as prices rise, some investors may continue to buy, potentially reinforcing the perception of a booming metals trade, which could increase costs for manufacturing companies reliant on these materials.
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