Mining stocks are back on top, and this time, copper, silver, and nickel are dragging them there. Since the beginning of 2025, the MSCI Metals and Mining Index has jumped nearly 90%, crushing semiconductors, banks, and even tech giants.
Wall Street fund managers who once ignored these stocks are now going heavy. They’re not doing it for fun. The demand for metals is exploding, and supply can’t keep up.
This rally isn’t slowing down. Copper is already up 50% this year. That’s because it’s essential for energy infrastructure, EVs, and AI data centers. But it’s not just copper. Silver, nickel, aluminum, and platinum are all gaining ground too. Even gold is holding strong. Investors are still piling into it as a hedge against what’s happening with U.S. money policy and rising global tensions.
Fund managers increase mining exposure despite caution
Mining stocks used to be dead weight. Everyone was focused on tech and banks, especially while China’s economy looked shaky. That changed when Beijing started cutting interest rates and pledging economic support. Suddenly, the metals sector didn’t look so bad.
Dilin Wu at Pepperstone said, “Mining stocks have quietly gone from a boring defensive sleeve to an essential portfolio anchor, one of the few sectors positioned to catch both changing monetary policy and a shaky geopolitical setup.”
What’s interesting is that copper and aluminum don’t follow the economy like they used to. They’ve become long-term bets. That’s why people are buying dips every time prices fall. Europe’s fund managers now have a net 26% overweight in the mining sector. That’s the highest in four years, even if it’s still below the 38% they had back in 2008.
M&A heats up as valuations stay cheap
Even after the rally, the sector still looks underpriced. The Stoxx 600 Basic Resources Index is trading at a forward price-to-book ratio of 0.47, while the average sits closer to 0.59. In past cycles, it peaked above 0.7. So there’s room left.
Alain Gabriel from Morgan Stanley said, “This valuation gap stays wide even though natural resources are more important than ever.” Alain also pointed out that companies are choosing to acquire other firms rather than build new sites. It’s cheaper, quicker, and less risky.
Right now, Anglo American is buying Teck Resources. And there’s talk of Rio Tinto teaming up with Glencore. Miners want scale. They want better portfolios. Copper is the target. Everyone knows there’s a supply problem. And if demand keeps pushing higher, so will prices. That means the stocks still have room to run.
Big players like BHP and Rio Tinto are still tied to iron ore. But iron’s not doing much. The last China-led supercycle is over. That’s why they’re moving to copper. Meanwhile, only a few companies offer pure copper exposure; Freeport-McMoRan and Antofagasta are two of them.
Some are staying cautious. Bank of America actually downgraded the sector in Europe. They said there’s a risk of bad economic surprises.
Nick Ferres from Vantage Point said he’s pulled back on gold for now. “I get concerned when the price of any asset goes parabolic,” Nick said. “But the miners are cheap. If gold holds up, we’d scale back in on a pullback.”
Bloomberg Intelligence says copper will still be in deficit this year, and the gap may even be worse than in 2025. As for gold, they say prices could hit $5,000. Goldman Sachs thinks it’ll go even higher, $5,400 by the end of 2026, about 8% above where it is now.
Gerald Gan from Reed Capital isn’t pulling back. “The upside drivers for commodities are now more powerful and more diversified,” Gerald said. “In the coming months, we’re planning to raise our mining exposure.”
