Metals: Market Outlook

Sound Planning Group Team

Please read full disclosure at the end of this article.

Manager’s Thoughts: Metals Outlook

The metals sector has meaningfully outperformed the major equity indexes this year and has demonstrated resilience during periods of volatility, including April’s tariff-related selloff. As of 10/31/25, the PICK ETF is up more than 35% year-to-date.

Sector rotation has been a key contributor to excess return, as emphasizing one metal over another has added significant value throughout the year. Technical indicators have been particularly effective in this asset class, with strong momentum signals complemented by fundamental and macroeconomic analysis. In addition, security selection has played a significant role: focusing on high-quality companies with favorable cost structures, strong balance sheets, and strategic positioning around major trends in the sector has further supported performance.

Year-to-date performance leadership has come from silver (+76.41%), followed by rare earth metals (+75.08%), gold (+56.89%), and energy-storage metals (+52.03%). Industrial metals have lagged the group, up +15.33% this year, which is closest to the S&P 500’s +17.56% return as of (11/11/25).

With the objective of positioning within the strongest market trends, we analyze and evaluate each subsector individually. Below is our current outlook across major segments within the metals sector:

Gold (GLD)

Represented by GLD: SPDR Gold Trust

Summary: Gold is a precious metal used primarily as a store of value and portfolio hedge, with demand driven by investment flows, central bank reserves, and jewelry. This category also includes mining companies that produce and sell gold.

Bull: Central banks continue to accumulate gold to diversify reserves, as well as to hedge currency exposure and geopolitical risk. Gold often outperforms equities during periods of geopolitical or economic uncertainty, underscoring its value as a diversification tool. Technical momentum remains a tailwind and higher spot prices support stronger financial performance for gold miners.

Bear: The precious metal has pulled back since mid-October, underscoring the potential for high volatility. The strength of the recent rally also raises the question of how much further the rally can continue.

Outlook: We maintain a cautiously optimistic stance, recognizing gold’s role in diversification, inflation hedging, and as a store of value. Within the subsector, we are emphasizing the strongest miners, with high-quality properties and efficient production.

Silver (SLV)

Represented by SLV: iShares Silver Trust

Summary: Silver is a precious metal with both investment and industrial uses, such as jewelry, electronics, and solar panels. The category also includes companies that produce and sell silver.

Bull: Silver is highly correlated with gold and benefits from many of the same factors driving demand as a store of value. It also tends to benefit during periods of trade policy disruptions, similar to gold.

Bear: Silver tends to be more sensitive to economic growth, and slowing growth in many developed economies could weigh on its industrial demand.

Outlook: Similar to gold, as silver shares many of the same drivers, we are cautiously optimistic on the metal, focusing on high-quality miners benefiting from strong financial performance driven by rising commodity prices.

Rare Earth Metals (REMX)

Represented by REMX: VanEck Rare Earth and Strategic Metals ETF

Summary: Rare earth metals are essential for modern technology, clean energy, and defense, and include 17 periodic table elements including neodymium, dysprosium, praseodymium, and cerium. They are “rare” due to the high cost and difficulty in extraction because they rarely occur in high concentrations and are chemically similar, making separation challenging.

Bull: Demand is driven by clean energy technologies such as electric vehicles and wind turbines, as well as digital and electronics applications, such as smartphones and semiconductors. Other bullish drivers include use cases for national defense and advancements in medical technology. Supply constraints from geopolitical tensions between the US and China can also boost prices in the short term, benefiting producers.

Bear: The subsector is heavily influenced by supply concentration in China. While trade tensions appear to be easing, they could reemerge, adding headline and geopolitical risk. The industry is historically very volatile due to rapidly shifting supply and demand dynamics, government defense policies, and China’s dominant role in the industry. Recent domestic trends prioritizing fossil fuels over clean energy are another downside risk.

Outlook: We are bullish on rare earth metals over the long term. These companies are increasingly tied to technological innovation, which drives strong demand, though the subsector remains very sensitive to geopolitical headlines.

Energy Storage & Battery Metals (LIT)

Represented by LIT: Global X Lithium & Battery Tech ETF

Summary: Battery and energy storage metals, including lithium, cobalt, nickel, and graphite, are essential for energy storage and the clean energy transition.

Bull: Lithium and other battery metals are key to the expansion of electric vehicles, renewable energy storage, and mobile technologies. Strong demand is expected across several developed economies as the global transition to cleaner energy and electrification continues.

Bear: Trends in the United States no longer strongly favor clean energy incentives, which could slow adoption and weigh on demand.

Outlook: We currently hold a neutral stance on battery metals, as strong long-term demand from electrification and energy storage is tempered by near-term uncertainty from weaker U.S. clean energy policies.

Industrial Metals (DBB)

Represented by DBB: Invesco DB Base Metals Fund

Summary: Industrial metals include copper, aluminum, zinc, and more, which are widely used in construction, manufacturing, and technology-related industrial applications.

Bull: Onshoring policies from Washington, D.C. may boost domestic manufacturing and increase demand for production facilities in the intermediate and longer term. Data centers and other technology-related infrastructure rely on metals like copper, aluminum, and steel for structural and electrical components, cooling, and safety, supporting demand as well.

Bear: Slowing global economic growth could weigh on prices and demand, and reduced government spending overall, particularly on infrastructure in the U.S., may further pressure demand for industrial metals.

Outlook: We maintain a cautious view on industrial metals, as slowing global economic growth and the cyclical nature of the sector present downside risks, though demand from data centers, AI infrastructure, and technology offers upside potential.

What’s Next for Metals?

After this year’s strong rally, advisors and investors are evaluating whether now is still an opportune time to invest in metals.

Synergy’s Focused Metals strategy makes a compelling case for a limited allocation within a diversified portfolio due to the unique, dual nature of metals as an asset class. The sector’s inherent flexibility means it can act as both an “offensive” and “defensive” play: at times, specific metals track like “risk-on” assets, driven by industrial demand and technological innovation, while at other times they perform like “risk-off” assets, offering crucial protection, diversification, and a store of value during economic uncertainty or inflationary periods.

By actively managing sector rotation and focusing on high-quality securities, the Focused Metals strategy aims to capitalize on these diverse, ever-shifting dynamics, offering investors an effective way to build what we believe is a better-diversified portfolio that is resilient across various market cycles. Market conditions, however, remain inherently unpredictable at times, so we consider the following in our outlook on the asset class as a whole:

Bull Case for Metals as an Asset Class:

The metals sector continues to demonstrate strong technical momentum, supported by heightened geopolitical risk, persistent central bank gold buying, and renewed investor demand for alternative assets. Precious metals, in particular, remain well positioned as investors seek a blend of growth potential, stability, and diversification. Together, these dynamics reinforce the sector’s strength as both a defensive and opportunistic allocation.

Bear Case for Metals as an Asset Class:

Healthy pullbacks are common within extended bull markets of any asset class and may be more likely following this year’s substantial gains. Slowing global economic growth may pressure demand for industrial metals, while the timing and pace of structural shifts such as the global transition toward clean energy and new technologies introduce uncertainty around which parts of the metals sector’s investable universe will benefit most in the next phase of the cycle.

Conclusion

In conclusion, the metals sector presents compelling opportunities underpinned by fundamental, macroeconomic, and technical trends, which have driven strong performance for the sector overall.

Joseph M. Maas,

CFA, CFP®, ChFC, CLU®, MSFS, CCIM, CVA, ABAR, CM&AA

Important Disclosures:

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Past performance does not guarantee future results. Forward-looking statements are not guarantees of future outcomes and are based on assumptions that may not materialize.

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Reference to market index information is included for illustrative purposes only. PICK – iShares MSCI Global Metals & Mining Producers ETF – The investment seeks to track the investment results of the MSCI ACWI Select Metals & Mining Producers ex Gold and Silver Investable Market Index. The fund will invest at least 80% of its assets in the component securities of the index and in investments that have economic characteristics that are substantially identical to the component securities of the index. The index measures the combined performance of equities of companies in both developed and emerging markets that are primarily involved in the extraction or production of diversified metals, the production of aluminum or steel and in the mining of precious metals and minerals. It is non-diversified. 

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