Goldman warns of metal market volatility from tariffs
Trade wars and AI demand could trigger price swings in critical metals.
1Tariffs spark market volatility
Goldman Sachs warns that ongoing tariff uncertainties will drive further volatility in metal markets. The bank's commodities research head Daan Struyven notes trade wars create fresh catalysts for price swings. Metal stockpiling has already tightened global liquidity, increasing risks of abrupt price movements. This comes as markets recover from 2025's commodity shocks.
2Critical metals at risk
Silver, copper, platinum and palladium face particular volatility according to Goldman's analysis. The bank's investor note highlights how these industrial metals respond sharply to trade policy changes. Unlike gold's meme-driven 2024 rally, these metals face fundamental supply-demand pressures. Their critical role in manufacturing makes them sensitive to inventory shifts.
3US stockpiling strategy
Goldman observes tariffs achieve national security goals by pulling metals into US inventories without government purchases. This creates artificial scarcity in global markets. While mines can't quickly respond to tariff changes, the policy effectively redirects metal flows. The result is weaker liquidity in non-US markets despite adequate global stockpiles.
4London silver squeeze
The 2025H2 silver short squeeze in London exemplifies the volatility risk. Prices hit 45-year highs as inventories tightened. Similar scenarios could repeat with other metals as trade uncertainty persists. Goldman notes these events occur when investor demand meets constrained ex-US supplies.
5Copper's AI vulnerability
Copper faces unique volatility due to its critical role in AI infrastructure. Demand is projected to outstrip supply for years. Recent analysis shows growing shortage fears as AI buildouts accelerate. This fundamental imbalance makes copper particularly prone to price spikes from any supply disruption.
6Manufacturing cost impact
Metal price volatility directly increases costs for manufacturers. Goldman warns higher prices may persist as some investors continue buying. While this signals a booming metals trade, it strains industries dependent on stable input costs. The bank notes this dynamic could last through 2026.
7Investor behavior feedback loop
Goldman observes that rising prices may attract more investors, creating a self-reinforcing cycle. This happened in 2025H2 when recovering demand met tight inventories. The bank warns similar conditions exist today. Investor inflows could exacerbate rather than stabilize price movements.
8Prolonged uncertainty ahead
Goldman anticipates continued metals market turbulence through 2026. Tariff policies, AI demand growth, and investor behavior create multiple volatility drivers. The bank stresses these factors interact unpredictably. Companies should prepare for extended periods of pricing uncertainty across industrial metals.
Original article: Business Insider — Goldman warns of metal market volatility from tariffs