DNCA Invest Strategic Resources

The outlook is becoming slightly more positive on the Iran-U.S. front with the resumption of negotiations and the gradual reopening of the Strait of Hormuz.

As for oil, supply flows are adjusting, but we are still far from a return to normal: fewer tankers, more expensive insurance, and more complex logistics. The risks in Yemen and the Bab el-Mandeb Strait further complicate the situation.

China is playing an increasingly important role in the discussions. Indeed, the country has a clear interest in avoiding a prolonged disruption in the Strait of Hormuz and the Red Sea.

September was marked by a more complex macroeconomic environment. The Federal Reserve remains very attentive to inflation, and Kevin Warsh’s rhetoric has become more hawkish. Real interest rates and the dollar therefore remain a significant short-term headwind for precious metals.

On the other hand, governments are finding it increasingly difficult to sustain high interest rates over the long term, given the level of debt and government deficits. The debate surrounding U.S. debt, foreign investors’ purchases of U.S. Treasury bonds, and Treasury interventions is therefore becoming increasingly important.

Since February, foreign holdings of Treasury bonds have fallen sharply, with a particularly significant decline in official holdings. China and, above all, Japan have reduced their positions. This ultimately raises the question of who will finance U.S. deficits and reinforces the theme of de-dollarization.

To address the potential risk of “financial repression” and the risk of currency depreciation, gold and precious metals can serve as a hedge.

As for industrial metals, supply constraints are no longer limited to the energy transition. They now simultaneously affect AI, power grids, defense, and industrial sovereignty. After a decade of underinvestment, supply is still slow to adapt to new demand prospects.

Copper remains under extreme supply constraints, with a sharp decline in Chilean production and numerous problems encountered at several major mining projects around the world.

Over the past month, the fund posted a return of -5.64% compared to -5.68% for its benchmark, the GS Metals Index, and, year-to-date, a return of -3.73% compared to -2.51%.

The conflict in the Middle East strengthens the case for the energy transition, which continues to support metal demand despite a more uncertain economic environment.

The proliferation of geopolitical shocks marks the end of a stable era of globalization. Structurally, these conflicts demonstrate that most countries are ill-prepared and that substantial investments are now imperative.

It is now vital to better secure access to raw materials (energy, metals, rare earths, etc.).

Precious Metals: Gold

The price of gold has suffered from the absence of Chinese investors (Golden Week).

U.S. Treasury bonds are more vulnerable: China and Japan are gradually reducing their exposure.

China: Its holdings of Treasury bonds fell from $1,300 billion in 2013 to $618 billion in July 2026 for both economic and geopolitical reasons.

Commentary by Joachim Nagel, President of the German Central Bank: High levels of public debt are heightening concerns about the credit risk of sovereign bonds. Consequently, geopolitical risks are prompting central banks to diversify their reserves.

Gold is an asset with no sovereign counterparty risk, making it attractive for reducing dependence on bonds and the dollar.

Industrial Metals

Copper :

The copper market is becoming tighter on the supply side.

Chilean production fell by 12% in August, reaching its lowest level since 2011.

In China, refiners are struggling to obtain enough copper concentrate.

At the same time, structural demand remains strong, driven by power grids, data centers, and electrification.

Zinc :

Despite lackluster demand, prices are holding at high levels due to supply constraints, particularly in Peru, Australia, and Sweden

Tin :

Production has improved, but demand remains structurally very strong, driven by the semiconductor sector.