The global metals market faced considerable strain throughout October. Gold prices dropped beneath the $4,000 per ounce mark, while silver experienced a sharp decline of 18.5% over the course of the month. Industrial metals also pulled back from their recent peaks due to various pressures, including inflation risks, anticipation of stricter policies from the Federal Reserve, and selling activity in stock markets, especially within the technology sector.
Specifically, gold settled near $3,930 an ounce, falling below the key psychological barrier of $4,000, representing an approximate 5% loss for the month. Silver performed even more poorly, with its price falling to roughly $49.8 an ounce, marking an 18.5% decrease. This downward trend was exacerbated by a strengthening US dollar, higher yields on US government bonds, and expectations of further monetary tightening by the Federal Reserve. Furthermore, geopolitical tensions no longer provided the same level of support for precious metals as before.
While the conflict in the Middle East has maintained elevated oil prices, contributing to inflation worries, investors are currently concentrating on the outcomes of the US midterm elections and the latest employment figures. Both these events are viewed as potential influences on expectations leading up to the Federal Reserve's December meeting.
Performance of Other Metals
Platinum and palladium also had a challenging October. Platinum decreased to approximately $1,420 an ounce, losing around 18% monthly, whereas palladium saw a drop to about $930 an ounce, with monthly losses surpassing 20%. Uncertainty regarding demand from the automotive industry added further pressure to both metals. Increased energy costs and higher interest rates could dampen vehicle sales, while the increasing use of electric vehicles is gradually lessening the need for conventional catalytic converters.
The outlook for the platinum market has shifted; a surplus of about 265,000 ounces is now projected for 2026, despite accumulated stocks remaining low after several years of supply shortages.
Copper prices fell to around $6.38 per pound, registering a 3% monthly decline, though it remains 30% higher compared to the previous year. Despite this dip, long-term factors continue to bolster copper demand. Mining output in Chile remains restricted, and the ongoing requirements of the energy sector, electricity grids, and technology infrastructure necessitate substantial quantities of the metal.
Investor sentiment has grown more reserved concerning the future of artificial intelligence and large investments in data centers, following the downturn in technology stocks. Concurrently, copper inventories stored in London Metal Exchange warehouses reached a four-month high, alleviating some prior anxieties about supply scarcity.
Aluminium dropped to about $3,045 per tonne and is nearing multi-month lows. The market is slowly moving past earlier fears of a severe supply deficit. Producers in the Middle East are resuming capacity, China is boosting its production and exports, and new supplies are entering the market from Indonesia, all of which have lessened the shortage risk that supported prices during the summer.
Zinc has shown greater resilience, trading near $3,790 per tonne. Its relative strength is attributed to limited supply, high operational costs for producers, and relatively low inventory levels.
In summary, October demonstrated that even when supply shortages exist, they do not automatically guarantee sustained growth across the metals market. Currently, precious metals are mainly influenced by Federal Reserve policy and the US dollar, while industrial metals are more reliant on actual demand, inventory levels, and the broader global economic forecast. Although long-term supports, such as the expansion of energy infrastructure and AI development, persist, a stable recovery in metal prices requires greater assurance that high interest rates and elevated energy expenses will not trigger a major contraction in worldwide demand.
