Commodities for Tuesday, Jan. 20, 2026

Key Concepts

• Geopolitical Risk: Impact of global political tensions (Ukraine war, US-Europe relations, US-China trade) on commodity prices.
• Gold as a Safe Haven: Investor tendency to move towards gold during times of uncertainty.
• Rare Earth Metals: Critical minerals essential for various technologies, with China currently dominating the supply chain.
• Gold-Silver Ratio: A metric used to compare the prices of gold and silver, indicating potential over or undervaluation of silver.
• Physical Surplus (Silver): The amount of silver remaining after subtracting total production from total consumption.
• Section 232 Tariffs: US trade policy allowing tariffs on imports deemed a threat to national security.
• Gamma Squeeze: A rapid increase in an asset's price due to options trading dynamics.
• Autocatalysts: Catalytic converters in vehicles, utilizing platinum and palladium to reduce emissions.
• LBMA: London Bullion Market Association, setting standards for precious metals trading.

Commodity Market Update & Geopolitical Influences

The energy complex, particularly oil, is experiencing volatility driven by geopolitical tensions, specifically the ongoing conflict in Ukraine impacting Kazakh oil transport and escalating confrontation between the US and Europe over Greenland. Concerns regarding Kazakh supply, due to Ukrainian attacks on facilities handling Kazakh oil, are contributing to upward pressure on oil prices.

Metals markets are showing mixed signals. Copper, despite recent record highs, is facing concerns about demand in China, the world’s largest industrial consumer. Gold, however, is reaching new all-time highs, fueled by geopolitical uncertainty and a weakening US dollar. Silver is also experiencing record peaks, but analysis suggests it may be overvalued relative to gold.

Agricultural commodities are currently experiencing selling pressure, leading to price declines.

Mining & Production Updates

All Mining is a top performer on the TSX, anticipating exceeding its 2025 gold production forecast. Orla now projects over 300,000 ounces of gold production in 2025, driven by performance at its Musselwhite Mine in Ontario, with an expected output of up to 360,000 ounces this year.

US-China Trade & Soybean Purchases

China has purchased approximately 12 million tonnes of US soybeans in the last three months, fulfilling a key pledge made during the Trump administration. This follows a period of stalled purchases due to escalating tariffs and trade negotiations between the US and China. The resumption of purchases occurred before a planned summit between President Trump and Chinese leader Xi Jinping.

Precious Metals – Gold & Silver Analysis

Gold prices have surged, topping $4,700 per ounce, driven by geopolitical instability and concerns about the independence of the Federal Reserve. Investors are seeking a safe haven, leading to a nearly 75% increase in gold prices over the past 12 months. There's a perceived shift away from US assets.

Silver is also at all-time highs, but BMO Capital Markets’ George Happel suggests it may be overvalued relative to gold, with the gold-silver ratio at its lowest point in over a decade. This is attributed to a potential increase in the silver physical surplus, meaning more silver supply than demand.

TD Securities’ Bart Malik on Market Dynamics

Bart Malik, Managing Director and Global Head of Commodity Strategy at TD Securities, highlights the interplay between geopolitics, the White House, and the Federal Reserve in driving gold prices. He notes concerns about potential political interference in the Federal Reserve, including a Justice Department investigation into the current Chairman, Powell, raising fears about the institution’s independence.

Malik emphasizes the risk of US Treasuries being used as a weapon in the context of US-Europe tensions, given that European and external players hold over $9 trillion worth of US debt. This scenario could force the Federal Reserve to inject liquidity into the market even with persistent inflation, creating unprecedented conditions. He believes gold could rise further if geopolitical tensions continue.

Platinum & Palladium Outlook

Platinum is also showing strength, currently trading at $2457, higher than previously anticipated. Demand is supported by continued use in autocatalysts (despite the rise of EVs) due to the Trump administration’s rollback of environmental regulations. Production declines in South Africa are also contributing to a supply squeeze. Potential Section 232 tariffs could further restrict supply and drive up prices.

Palladium, heavily used in autocatalysts, is also facing supply constraints due to sanctions on Russia, the largest producer. Despite initial expectations that EV adoption would reduce palladium demand, the continued popularity of hybrid vehicles is maintaining demand. While formal sanctions on Russian palladium are limited, reputational risk discourages financial institutions from handling it.

Rare Earth Metals & Greenland Investment

Gracelyn Bhaskaran, Director of the Critical Minerals Security Program at the Centre for Strategic and International Studies, emphasizes the strategic importance of Greenland’s rare earth deposits. While Greenland presents significant logistical challenges (80% covered in ice, sparse infrastructure), it holds substantial deposits, including the Kvanefjeld deposit and the Tan BREEZE deposit.

China already has a presence in Greenland’s rare earth sector, but Bhaskaran argues that coordinated investment from the US and its allies is crucial to diversify the supply chain and prevent China from controlling the processing of these critical minerals. She stresses that the key is not just who mines the minerals, but where they are processed. The US government’s recent intervention in the Tan BREEZE acquisition demonstrates a commitment to securing alternative supply routes.

Silver Market Analysis – BMO Capital Markets

George Happel of BMO Capital Markets argues that the recent surge in silver prices relative to gold is unsustainable. He points to a potential increase in the silver physical surplus, driven by a possible peak in solar panel installations and increased efficiency in silver usage within solar panels. He believes that as the surplus grows, the gold-silver ratio will likely revert to historical norms, implying a potential decline in silver prices relative to gold.

Conclusion

Commodity markets are currently navigating a complex landscape shaped by geopolitical risks, shifting trade dynamics, and evolving demand patterns. Gold is benefiting from its safe-haven status, while silver’s recent gains may be unsustainable. Strategic minerals, particularly rare earth elements, are becoming increasingly important, prompting a focus on diversifying supply chains and securing access to critical resources. The interplay between political factors, economic policies, and technological advancements will continue to drive volatility and shape the future of commodity markets.