In late January 2026, global precious metals markets experienced a rare deleveraging event. Silver briefly fell below $75 per ounce, recording a single-day drop of 35.12%. Gold also tumbled, breaking below $4,710 per ounce with a daily loss exceeding 12%. The Chicago Mercantile Exchange (CME) raising margin requirements on futures contracts is widely seen as the trigger, compounded by hawkish expectations from incoming Fed Chair Kevin Warsh, which strengthened the dollar and added pressure on metals.
Gold and Silver Still Up Big Over Cycle, Copper Lags
When viewed over a longer horizon, the current precious metals supercycle began in late 2023. From January 2024 to February 5, 2026, gold rose from $2,039 to $4,862 per ounce, a cumulative gain of over 138%. Silver surged from $22.94 to $76.8 per ounce, up 235%. Platinum gained about 118% and palladium 72%. However, copper rose from $3.87 to $5.79 per pound, a gain of just 49.6%, lagging significantly behind. As gold and silver consolidate after the deleveraging, capital rotation into industrial metals like copper appears plausible.
AI Data Centers and EVs: Twin Engines for Copper Demand
Copper's demand story is being reshaped by artificial intelligence and green energy. The International Copper Association reports that a battery electric vehicle uses about 83 kg of copper, 3.6 times that of an internal combustion vehicle. Reuters estimates EV copper demand alone could reach 2.2 million tonnes annually by 2030. An even bigger driver is AI data centers: a single hyperscale facility using Nvidia's HGX system can require up to 50,000 tonnes of copper. Current global data center copper consumption is around 500,000 tonnes per year, potentially rising to 3 million tonnes by 2050—a sixfold increase. Grid upgrades (cables, transformers, substations) also represent a huge source of demand.
Supply Deficit Already Visible, Gap Likely to Widen
On the supply side, mine output is struggling to keep pace. S&P Global projects global copper demand will grow from 28 million tonnes in 2025 to 42 million tonnes in 2040, a 50% increase. Meanwhile, the International Copper Study Group (ICSG) reports global mine production at just 22.4 million tonnes—meaning a supply deficit already exists. With supply constrained and demand structurally boosted by AI and electrification, the copper deficit is expected to persist and widen.
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