WMC: Unearthing the Metals Melt-up
Authors
Adam Turnquist – Chief Technical Strategist LPL Financial
Thomas Shipp – Head of Equity Research LPL Financial
Client Summary
Positive Factors
- Strong Metals Momentum: Gold, silver, and other metals continued their powerful run into 2026, supported
by rising demand, tight supplies, and strong investor interest. - Supportive Interest-Rate Outlook: The Federal Reserve is expected to cut rates this year, increasing the
appeal of non-coupon bearing securities like gold and silver. - Safe-Haven Buying Remains Strong: Ongoing geopolitical uncertainty — from tensions involving Iran,
Russia-Ukraine, and other global hotspots — continues to boost interest in assets seen as protective during
periods of instability. - ETF Demand Is Surging: Gold and silver exchange-traded funds saw record inflows in 2025, creating buying
pressure that has reinforced upward price movement.
Concerning Factors
- Rising Metal Prices Could Lift Inflation: Copper — widely used across industries — jumped 41% last year, and
- historically higher copper prices have pushed consumer prices higher within 12–36 months.
- Trade and Tariff Uncertainty: Export restrictions and tariff policy changes could disrupt markets and drive
further volatility. - Global Supply Constraints: Production outages, underinvestment in mining, and geopolitical disruptions are
tightening supply lines, increasing the risk of price spikes. - Metals at a Technical Inflection Point: Gold’s long-term trend versus U.S. stocks is at a major resistance level;
whether it breaks out or reverses could be a leading indicator for future market leadership.
LPL Research Perspective
- Overall Metals Outlook Remains Positive: LPL Research sees continued support for both precious and
industrial metals thanks to policy tailwinds, geopolitical uncertainty, supply shortages, and strong investor
appetite. - Inflation Risk Is Back on the Radar: Rising metals prices — especially copper — could complicate the
disinflation progress made in 2025 and keep inflation elevated longer than expected. - Equities Remain Neutral but Supported: Research maintains a neutral stance on stocks but still sees solid
underlying fundamentals and is inclined to buy on dips as long-term trends stay intact. - Fixed Income Positioning Is Balanced: Research remains neutral on core bonds but shows a slight preference
for mortgage-backed securities over corporate bonds while avoiding adding interest-rate sensitivity at
current levels.
Disclosures
This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any economic forecasts set forth may not develop as predicted and are subject to change.
References to markets, asset classes, and sectors are generally regarding the corresponding market index. Indexes are unmanaged statistical composites and cannot be invested into directly. Index performance is not indicative of the performance of any investment and do not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.
Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services. LPL Financial doesn’t provide research on individual equities. Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise and bonds are subject to
availability and change in price. High yield/junk bonds (grade BB or below) are not investment grade securities, and are subject to higher interest rate, credit, and liquidity risks than those graded BBB and above. They generally should be part of a diversified portfolio for sophisticated investors
All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy. Because of theirnarrow focus, sector investing will be subject to greater volatility than investing more broadly across many sectors and companies.
The Standard & Poor’s 500 Index (S&P500) is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. The PE ratio (price-to-earnings ratio) is a measure of the price paid for a share relative to the annual net income or profit earned by the firm per share. It is a financial ratio used for valuation: a higher PE ratio means that investors are paying more for each unit of net income, so the stock is more expensive compared to one with lower PE ratio.
Earnings per share (EPS) is the portion of a company’s profit allocated to each outstanding share of common stock. EPS serves as an indicator of a company’s profitability. Earnings per share is generally considered to be the single most important variable in determining a share’s price. It is also a major component used to calculate the price-to-earnings valuation ratio.
Precious metal investing involves greater fluctuation and potential for losses. The fast price swings in commodities will result in significant volatility in an investor’s holdings. Commodities include increased risks, such as political, economic, and currency instability, and may not be suitable for all investors.
All index data from FactSet.
This research material has been prepared by LPL Financial LLC.
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