1. Introduction: A Rotation In Full Swing
Markets shift. Sentiment evolves. Capital moves, not always rationally, but always with purpose. We are now witnessing one of the most significant rebalancing periods in recent financial history: a broad rotation away from intangible, speculative assets toward tangible, supply-constrained ones.
Earlier this year, we wrote that the capital rotation into hard assets wasn’t theoretical—it had already begun. Gold had broken out. Institutions, central banks, and private investors were positioning defensively in a world increasingly defined by inflation, geopolitical instability, and unsustainable fiscal policies.
Today, that trend has accelerated. Silver, copper, and oil have decisively joined the rally. This is no longer a quiet repositioning, it’s a broad-based surge into commodities, signaling a new phase of the market cycle. The implications are far-reaching: sector leadership is changing, portfolio construction is evolving, and capital is looking for durability and intrinsic value.
Let’s walk through the data, historical precedents, and what this means for investors in the months and years ahead.
2. Mid-Year Commodity Scorecard
As of mid-June, here’s the state of play across key commodities:
- Gold: $3,383/oz — up 30% YTD. Gold has reasserted itself as the ultimate store of value in a system increasingly prone to risk.
- Silver: $36.90/oz — up 24% YTD. Often a late mover, silver is catching up quickly with momentum from both investors and industrial buyers.
- Copper: $4.90/lb — up 16% YTD. Electrification and renewable infrastructure are fueling long-term demand.
- Oil (Brent): $74.40/bbl — up 8% YTD. The price remains resilient despite global volatility and shifting demand narratives.
This performance is aligned with what you would expect in a late-cycle, inflation-sensitive, and geopolitically unstable environment. For the first time since the early 2000s, commodities are outperforming the S&P 500 on a sustained basis.
As of Q2, cumulative inflows into commodity ETFs have reached a record $52 billion, with gold accounting for nearly half. Meanwhile, equity fund outflows have accelerated, reflecting waning investor confidence in traditional growth sectors.
3. A Look Back To Look Ahead: Historical Context
Capital rotation from financial assets to hard assets is rare, but when it happens, it marks the beginning of a new investing regime. Let’s revisit three key historical episodes:
- 1970s: Marked by stagflation, the collapse of Bretton Woods, and oil embargoes. Gold rose over 2,000%, oil multiplied 11x. The shift was structural and inflation-driven.
- 2000s: Post-dotcom crash, a weakening dollar and China’s industrialization led to a commodity supercycle. Copper, oil, and gold surged.
- 2008–2011: In response to global quantitative easing and sovereign debt crises, gold soared to $1,900.
- Commodities briefly became the market’s primary hedge.
Now, in 2025, the current environment combines elements of all three past cycles: inflation pressure, geopolitical instability, technological transformation (AI), central bank gold accumulation, and rising trade protectionism.
Historical patterns suggest these rotations typically span 5–10 years. If this cycle began in earnest in late 2022, we could be in the early to middle innings. The depth and breadth of the move, especially as mining CAPEX remains 40% below its 2012 peak, indicate there is significant room to run.
4. Gold: Still The Centerpiece
Gold’s rally is not simply a fear trade, it is a reflection of a long-term shift in global capital allocation.
Key drivers:
- Central bank buying: In 2024, central banks bought a record 1,037 tonnes of gold, surpassing even post-COVID levels. This trend has continued in 2025, led by China, Turkey, and Poland.
- Currency instability: As the U.S. fiscal deficit approaches $3 trillion annually, questions about the sustainability of fiat systems are growing. The debt-to-GDP ratio now exceeds 125%.
- Declining Treasury appetite: U.S. Treasury auctions are facing soft demand from foreign buyers, with Japan, China, and Gulf states reducing purchases.
- Loss of confidence in monetary policy: After a decade of unconventional easing and prolonged inflation surprises, gold is being repriced.
Gold is increasingly viewed as the only asset not reliant on someone else’s balance sheet. In a world where counterparty risk is rising, that matters.
Long-term outlook: Should central banks continue increasing their gold allocations by even 1% annually, the marginal demand could push prices significantly higher. Additionally, if gold reclaims even 5–7% of global investment portfolios (down from 20% in the 1970s), total market value would need to rise substantially to meet demand.
$10,000/oz is not a forecast, it’s a plausible endpoint under certain monetary and fiscal trajectories. Even a reversion to mean valuations relative to the S&P 500 would imply another 100–150% upside from current levels.
5. Silver, Copper & Oil: Following The Leader
Silver
Silver benefits from the same macro tailwinds as gold, but with the added boost of industrial demand. The solar sector alone is expected to consume over 180 million ounces of silver this year, a 25% increase from 2022. As countries push for electrification and green energy, silver’s dual use becomes critical.
The gold-to-silver ratio remains at 90:1, well above the historical average of 65:1, suggesting further upside potential for silver.
Copper
Copper demand is accelerating, driven by EVs, AI data centers, and national infrastructure investments. Yet global copper mine production rose just 1.5% in 2024. Inventories at the LME are at decade lows. Supply growth is constrained by permitting delays, limited new discoveries, and community opposition.
The U.S. and Canadian governments have stepped in with over $11 billion in combined mining subsidies, tax credits, and loan guarantees since 2023. Projects in British Columbia, Arizona, and Ontario are benefiting, but permitting timelines have lengthened from an average of 4.5 years to nearly 8 years.
Oil
Oil remains central to the global economy, even amid aggressive decarbonization targets. Global CAPEX in upstream oil and gas remains 35% below 2014 levels. Meanwhile, geopolitical flashpoints are on the rise: Iran’s naval posturing in the Gulf, Israel’s strikes on infrastructure, and tensions in Venezuela and Nigeria.
Supply-side tightness is returning. OPEC+ cuts, combined with underinvestment, are pushing the marginal cost of production higher. Spare capacity is tightening, and the IEA forecasts a potential shortfall of 2 million barrels per day by year-end.
6. Who Could Be Next?
Several overlooked assets are now positioned to join the broader rotation:
- Platinum & Palladium: Critical in hydrogen fuel cells and catalytic converters. China’s fuel cell push and EU’s tightening auto regulations could drive a resurgence.
- Uranium: As nuclear re-enters energy policy across Europe, Asia, and North America, uranium demand is projected to exceed 210 million pounds by 2030. Supply remains bottlenecked, with production cuts and rising contract prices.
- Nickel, Cobalt, Rare Earths: Key materials for batteries, defense, and electronics. Western governments are now investing in processing infrastructure to reduce dependence on China.
7. Final Word: This Is A Structural Shift
This isn’t just a rotation, it’s a multi-year realignment. Capital is migrating from intangible growth to tangible value. From overvalued software to underbuilt infrastructure. From central bank promises to physical assets with proven scarcity.
Gold led the charge, but it’s now part of a broader move across the commodity complex. Inflation protection, geopolitical hedging, and supply constraints are converging, and the market is responding accordingly.
This is how cycles turn. And it’s not over.
About Moneta
Moneta is a boutique investment banking firm that specializes in advising growth stage companies through transformational changes including major transactions such as mergers and acquisitions, private placements, public offerings, obtaining debt, structure optimization, and other capital markets and divestiture / liquidity events. Additionally, and on a selective basis, we support pre-cash-flow companies to fulfill their project finance needs.
We are proud to be a female-founded and led Canadian firm. Our head office is located in Vancouver, and we have presence in Calgary, Edmonton, and Toronto, as well as representation in Europe and the Middle East. Our partners bring decades of experience across a wide variety of sectors which enables us to deliver exceptional results for our clients in realizing their capital markets and strategic goals. Our partners are supported by a team of some of Canada’s most qualified associates, analysts, and admin personnel.