Mining stocks are back at the top, this time with copper, silver and nickel leading the way. Since the beginning of 2025, the MSCI Metals and Mining Index has soared nearly 90%, crushing semiconductors, banks, and even tech giants.
Wall Street fund managers who once ignored these stocks are now weighing in. They’re not doing it for fun. Demand for metals is increasing explosively, and supply cannot keep up.
This rally isn’t slowing down. Copper is already up 50% this year. This is because it is essential for energy infrastructure, EVs, and AI data centers. But it’s not just copper. Silver, nickel, aluminum and platinum are all gaining popularity as well. Even gold is strong. Investors are still rushing into it as a hedge against what’s happening with U.S. monetary policy and rising global tensions.
Fund managers increase mining exposure despite caution
Mining stocks used to be deadweight. Everyone was focused on technology and banking, especially as China’s economy looked unstable. The situation changed when the Chinese government started cutting interest rates and promising economic support. Suddenly, the metal sector didn’t look so bad.
“Mining stocks have been quietly transforming from a boring defensive role to an important portfolio anchor, making them one of the few sectors that can respond to both changes in monetary policy and unstable geopolitical regimes,” said Pepperstone’s Dilin Wu.
What’s interesting is that copper and aluminum aren’t following the economics like they used to. They have become a long-term bet. This is why people buy on the market every time the price drops. European fund managers currently have a net overweight of 26% in the mining sector. Although still lower than 2008’s 38%, it was the highest in four years.
M&A intensifies despite low valuations
Even after the rally, the sector still looks cheap. The Stoxx 600 Basic Resources Index is trading at a forward price/book ratio of 0.47, while the average is closer to 0.59. In past cycles, it has reached peaks above 0.7. So, there is still space left.
“This valuation gap remains wide even as natural resources are more important than ever,” said Morgan Stanley’s Alan Gabriel. Alan also pointed out that companies are choosing to acquire other companies rather than building new sites. It’s cheaper, faster, and less risky.
Currently, Anglo American has acquired Tech Resources. There is also talk of Rio Tinto partnering with Glencore. Minors want scale. They want a better portfolio. Copper is the target. We all know there is a problem with supply. And if demand continues to rise, so will prices. This means that the stock price still has room to rise.
Major companies such as BHP and Rio Tinto remain tied to iron ore. But iron is not very effective. The last supercycle led by China is over. That’s why they’re moving to copper. On the other hand, only a few companies offer exposure to pure copper. Freeport-McMoRan and Antofagasta are two of them.
Some remain cautious. Bank of America actually downgraded its European division. They said there was a risk of bad economic surprises.
Vantage Point’s Nick Ferres said he’s holding off on the gold medal for now. “It’s worrying when asset prices go parabolic,” Nick says. “But miner prices are low. If gold holds up, we will scale back in response to the pullback.”
Bloomberg Intelligence says copper remains in the red this year, and the gap could be even worse than in 2025. As for gold, he said the price could reach $5,000. Goldman Sachs believes it will rise further to $5,400 by the end of 2026, about 8% above current levels.
Reed Capital’s Gerald Gunn isn’t backing down. “The drivers of commodity upside are now stronger and more diversified,” Gerard said. “We plan to increase our mining exposure in the coming months.”
