Metals

“Metals” is really two markets. Base metals — copper, aluminium, zinc, priced largely through the LME — are an industrial bet, moving with construction, manufacturing and the energy transition. Precious metals — gold and silver, traded on COMEX and the LBMA — trade as much on the dollar, real yields and safe-haven demand as on physical supply. Because the two behave so differently, the biggest modelling mistake is treating them as one exposure; a metals book’s real risk lives in how those two halves interact.

How the market works

Base metals — copper, aluminium, zinc, nickel, lead and tin — trade on the London Metal Exchange (LME), the world centre for industrial-metals trading, where the LME Official Price is the global benchmark used to index physical contracts and hedges (copper and aluminium alone average hundreds of thousands of lots traded daily, out to ten years). Physical settlement runs through a network of LME-approved warehouses, so warehouse stocks and delivery premiums matter to price. Precious metals trade differently: gold’s three main venues — the London OTC market, US COMEX futures and the Shanghai Gold Exchange — account for over 90% of global volumes (roughly US$360bn/day in 2025), and price is driven heavily by real rates, central-bank buying and safe-haven demand.

Major trade flows

Base-metal supply is concentrated in mining regions — Chile and Peru dominate copper ore, Indonesia leads nickel, Guinea and Australia bauxite — while China is the pivotal smelter and consumer, anchoring demand for the industrial complex. The USGS Mineral Commodity Summaries track world production, reserves and import-reliance for more than 90 minerals, increasingly framed around energy-transition “critical minerals.” Precious-metal flows follow investment and official-sector demand, with vaulting hubs in London, Zurich and New York and strong physical demand centres in China and India.