Metals face a more selective second half
Metals at the midpoint of 2026 are being pulled in different directions. Gold has lost some of its momentum as higher real yields weigh on the market, silver still has the support of a structural deficit, but that story now needs fresh investment demand to keep working, and copper remains firm on long-term supply concerns even as the near-term backdrop looks less forgiving. The second half of the year is therefore less about whether metals can rise again, and more about which force matters most: rates, deficits or renewed financial flows.
Gold: higher real yields are back in control
Gold's long-term foundations remain intact. Central bank buying continues to provide a strong source of demand, while geopolitical uncertainty and concerns over government debt have helped support prices over recent years.
However, the market has become increasingly focused on real yields. As inflation expectations have eased and US Treasury inflation-protected securities (TIPS) yields have moved higher, the opportunity cost of holding a non-yielding asset has increased. That has taken some of the momentum out of gold's rally and prompted investors to reassess how much they are willing to pay for defensive assets.
Importantly, the recent correction does not look like a collapse in confidence. ETF flows have moderated rather than reversed sharply, while official-sector demand remains supportive. Instead, the market appears to be shifting away from the aggressive buying seen earlier in the year and back towards a more selective approach.
For H2, the outlook for gold will depend heavily on the path of interest rates. A decline in real yields could provide the catalyst for another move higher, while a stronger dollar and persistently elevated rates may continue to limit upside. Gold retains its role as a defensive asset, but for now the price of money matters more than geopolitics.
Gold - Cash, 2026 - present
Sources: TradingView, Daniel Kostecki
Silver: a deficit alone may not be enough
Silver continues to benefit from a structural supply deficit, with demand expected to outpace supply for a sixth consecutive year. That shortage has been a key driver of the metal's strong performance in recent years and continues to provide an important layer of support.
However, the outlook has become more nuanced. Industrial demand remains substantial, particularly from sectors linked to electrification and renewable energy, but growth is slowing in some areas as manufacturers look to reduce silver usage and improve efficiency. At the same time, weaker demand from jewellery and other end markets has tempered some of the enthusiasm surrounding the deficit story.
Unlike gold, silver does not enjoy consistent support from central bank buying. As a result, investor sentiment and capital flows play a much larger role in determining price direction. While tight supply conditions remain supportive, they are not always enough on their own to drive sustained gains.
For H2, silver's prospects may depend less on the size of the deficit and more on whether investors return to the market. If real yields begin to fall and demand for inflation or geopolitical hedges strengthens, silver could outperform. If not, the metal may remain prone to periods of sharp volatility rather than a sustained upward trend.
Silver - Cash, 2026 - present
Sources: TradingView, Daniel Kostecki
Copper: the strongest long-term story, but near-term risks remain
Copper remains one of the market's most compelling long-term themes. Demand from electrification, renewable energy, data centres and artificial intelligence infrastructure is expected to grow steadily over the coming decade, while concerns persist over whether future mine supply will be sufficient to meet that demand.
That structural backdrop has helped keep prices elevated, even as the macroeconomic environment has become less supportive. Unlike precious metals, however, copper remains closely tied to the health of the global economy. Concerns over slower growth, trade tensions and weaker manufacturing activity continue to weigh on sentiment, particularly outside China.
China remains the key market to watch. Strong buying interest during periods of price weakness has helped underpin demand, while inventory levels and trade policy developments have become increasingly important drivers of short-term price action. Supply disruptions at major mining operations have also provided additional support, reinforcing concerns about the availability of future supply.
For H2, copper is likely to remain caught between a powerful long-term demand story and a more uncertain economic backdrop. While slower global growth could limit gains in the near term, persistent supply concerns and resilient Chinese demand suggest the metal may continue to find support on pullbacks. Of the three metals, copper arguably retains the strongest structural investment case, but it may also be the most sensitive to shifts in global growth expectations.
Copper - Cash, 2026 - present
Sources: TradingView, Daniel Kostecki
What matters most in H2?
The outlook for metals in the second half of the year will largely be shaped by the balance between supportive fundamentals and a less favourable macro backdrop. Gold continues to benefit from strong structural demand, but needs lower real yields to regain momentum. Silver remains supported by a supply deficit, although renewed investor interest may be needed to drive the next leg higher. Copper still offers one of the strongest long-term growth stories, but near-term performance will depend heavily on Chinese demand and global economic conditions.
The common thread across all three markets is that financial flows have become more selective. Investors are no longer buying the metals story indiscriminately, which places greater emphasis on fundamentals and macroeconomic developments. If interest rates begin to fall and growth remains resilient, metals could enjoy a stronger second half. If not, markets may remain driven by volatility rather than a sustained trend.
For now, the metals story remains intact, but investors are demanding stronger reasons to believe in it.
