Core Viewpoint - Gold and silver prices have rebounded significantly after a recent selloff, with analysts indicating that future gains will depend on foreign exchange movements and interest rate expectations [2][3][8]. Price Movements - Spot gold increased by 2.4% to $5,054.6 per ounce, while gold futures rose by approximately 3.4% [2]. - Spot silver saw a rise of 5.8% to $90 per ounce, with silver futures up 8% at $90.16 [2]. Market Context - The rebound in precious metals follows a nearly 10% drop in gold and a 30% decline in silver prices, marking the worst one-day performance for silver since 1980 [2]. - Analysts suggest that the recent price movements are a result of dip buying after significant corrections in the market [3]. Mining Companies Performance - London-listed mining companies experienced gains, with Rio Tinto up 1% and Anglo American up 0.7%, while Antofagasta saw a slight decline of 0.2% [4]. - The FTSE 350 Precious Metals and Mining Total Return Index rose by 2% to approximately 34,963 [4]. Investor Sentiment - UBS CEO noted that clients are becoming more cautious, seeking protection and moving away from the tech sector [4]. - There is a trend of excess cash being redeployed into capital markets, including precious metals [5]. Future Outlook - Analysts predict that further gains in precious metals may be muted, with volatility expected to persist [7]. - The pace and sustainability of future price increases will be influenced by the U.S. dollar, interest rate expectations, and overall risk sentiment [8]. - Goldman Sachs has set a price target of $5,400 for gold by the end of 2026, while BofA Securities has a more bullish target of $6,000 [9]. Market Fundamentals - The physical market fundamentals are described as somewhat shaky but still supportive [10]. - Political uncertainty surrounding the upcoming mid-term elections and the direction of U.S. interest rates under the potential new Federal Reserve chair could impact forecasts [10][11].

Summary of Key Points from J.P. Morgan's Research on Metals and Mining Industry Overview - The report discusses the global mining equities sector, indicating it is on the verge of a new supercycle driven by increased demand for metals, particularly due to advancements in AI technology [2][10]. - Mining stocks have transitioned from being viewed as defensive investments to essential portfolio anchors, capable of capitalizing on changing monetary policies and geopolitical volatility [2]. Market Performance - Mining equities have outperformed the MSCI Europe index by approximately 60% since Liberation Day, with historical data showing that mining stocks typically outperform the market by around 100% following major equity market downturns [3][10]. - The report notes that the surge in metal prices in 2025/26 is primarily driven by supply-side shocks, with potential for further increases if China's demand for metals strengthens in 2026 [10]. China Metals Demand and Inventory Trends - Recent data indicates that China's demand for metals has been weak for the past nine months, with high inventory levels observed across various metals [6][14]. - As of January 23, 2026, copper inventories in China reached 305kt, the highest level for this time of year since 2021, indicating a stronger-than-usual restocking trend [14][41]. - Aluminum inventories also saw a build-up of 7kt, bringing total aluminum inventory to 743kt, which is at the upper end of historical averages [20][22]. - Zinc inventories increased by 0.2kt, with total zinc inventory at 111kt, also at the top end of historical averages [24][27]. Steel Production and Market Conditions - China's steel output for the 10 days ending January 20, 2026, showed an annualized run rate of 891Mt, which is a 2% decrease from the previous period and a 7% year-over-year decline, indicating a slowdown in production [29][36]. - Steel inventory levels remain high, flat week-over-week, and up 21% year-over-year, although lower production rates have slowed inventory accumulation [36]. Monetary Policy and Economic Indicators - The People's Bank of China (PBOC) has injected a total of CNY1 trillion (~$144 billion) in liquidity through medium-term lending facilities, the highest injection in January in recent years, which may influence metals demand positively [10]. - The easing of China's monetary policy conditions could potentially stimulate demand for metals, adding further upward pressure on prices [10]. Conclusion - The report emphasizes the importance of monitoring China's economic indicators and inventory trends as they provide critical insights into future demand for metals and overall market conditions [13][36]. - The potential for a supercycle in mining equities is contingent on both supply-side dynamics and the recovery of demand from China, making it a sector to watch closely in the coming years [2][10].

Market Overview - US stock futures are mixed, with Dow Jones futures down 0.5%, S&P 500 futures up 0.2%, and Nasdaq futures up 0.6% [1] - The Mag7 stocks' market cap share of the S&P 500 has decreased from 33% to 31% over the past two months, indicating a healthy development in the market [2] - Analysts express optimism for a potential surge in big tech stocks like Microsoft, Meta, Tesla, and Apple in the upcoming earnings reports [3] Currency and Commodities - The US dollar is weakening, with the DXY index reaching a four-month low, leading to increased interest in gold and the Swiss Franc as safe havens [4] - Deutsche Bank analysts suggest that gold could rise to $6,000 per ounce due to higher geopolitical volatility and increased demand for non-dollar assets [11][13] - European gold ETFs have attracted over €2 billion in net inflows since the beginning of the year, reflecting investor unease amid rising geopolitical tensions [22] UK Housing Market - The UK government announced a cap on annual ground rents at £250 for the first 40 years of a lease, which is not expected to significantly impact the lettings agency sector [5][7] - Analysts believe this policy aligns with the government's trend towards a more regulated housing market, favoring consumers [6] - The insurance industry has expressed concerns about the implications of retrospective changes to property rights, which could affect investor confidence in the UK market [10][11] Company Updates - HSBC has become the largest company in the FTSE 100, with a 2.8% surge attributed to positive developments in China's industrial profits [15][17] - Dr Martens reported a revenue decline of 3.1%, falling short of expectations, while still aiming for significant profit growth in the current financial year [33][39] - Burberry shares rose 1.5% after Barclays upgraded the stock, citing a successful turnaround strategy [20][21] Trade Developments - The EU and India have agreed on a significant trade deal, expected to cut tariffs on over 90% of EU goods exports, potentially boosting exports by €20-30 billion annually [41][42]

Summary of J.P. Morgan's China Metals Activity Tracker Industry Overview - **Industry Focus**: Base metals, specifically copper, aluminium, and zinc in China - **Date of Analysis**: Week ended January 16, 2026 Key Insights - **Inventory Trends**: Significant re-stocking of base metals occurred in late 2025 and early 2026, with copper, aluminium, and zinc inventories starting the year at higher-than-average levels [1][8] - **Copper Demand**: Weaker domestic demand for copper in China is attributed to semi-finished product producers halting production due to lower orders and challenges in hedging copper exposure during price rallies [1] - **Copper Inventory Levels**: Copper inventory reached 293,000 tons at the end of the reporting week, the highest for this period since 2021, indicating a continuation of the re-stocking cycle into the Chinese New Year [8][30] - **Aluminium and Zinc Trends**: Similar trends observed for aluminium and zinc, with inventories also above average levels as the Chinese New Year approaches [8] Macroeconomic Context - **Chinese Economic Indicators**: Money supply (M2) increased by 8.5% year-over-year in December 2025, indicating a potential boost in economic activity [2] - **Monetary Policy**: The People's Bank of China (PBOC) implemented monetary easing measures, including a 25 basis point cut for structural policy tools, aimed at supporting policy-driven sectors such as technology and green initiatives [2] Market Outlook - **Copper Demand Outlook**: Positive outlook for global copper demand and mining equities, supported by a projected RMB 4 trillion investment in Chinese grid infrastructure, which is a 40% increase compared to the previous five-year plan [2] - **Substitution Risks**: Analysis suggests that substitution of copper is unlikely to significantly mitigate supply deficits before 2030 [2] Additional Observations - **Steel Production**: China's steel output reached an annualized run rate of 905 million tons, showing a 23% increase compared to the previous period, indicating seasonal acceleration ahead of the Chinese New Year [21] - **Steel Inventory**: Steel inventory levels were flat week-over-week but up 24% year-over-year, starting the year at relatively high levels [28] Conclusion - The analysis indicates a robust re-stocking phase for base metals in China, driven by macroeconomic factors and seasonal demand patterns. The outlook for copper and other metals remains positive, although challenges in demand and production adjustments may impact market dynamics in the near term.

Investors interested in stocks from the Mining - Miscellaneous sector have probably already heard of Norsk Hydro ASA (NHYDY) and Anglo American (NGLOY) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank puts an emphasis on e ...

ab 16 January 2026 Global Research Sector Keys Copper Crunch - the Bull Market accelerates Equities Global Basic Materials Myles Allsop Analyst myles.allsop@ubs.com +44-20-7568 1693 Daniel Major Ethan Hong Associate Analyst ethan.hong@ubs.com +1-212-649 8258 UK Takeover Panel Disclosure: Analyst daniel.major@ubs.com +44-20-7568 3472 Amy Yi Li Analyst amy-yi.li@ubs.com +44-20-7568 2064 George Eadie Analyst george.eadie@ubs.com +1-646-996 4596 Alex Stansbury, CFA Associate Analyst alex.stansbury@ubs.com +1-21 ...

Group 1 - The proposed merger between Rio Tinto and Glencore may face significant regulatory challenges, particularly in China, potentially requiring asset sales for approval [1][2] - The current proposal involves an all-share acquisition, with Rio Tinto potentially acquiring "some or all" of Glencore [2] - China's regulators are expected to scrutinize the potential market dominance of a combined Rio Tinto-Glencore entity in the copper and iron ore sectors [3] Group 2 - Demand for copper assets is increasing due to their importance in the green energy transition and AI technologies, prompting both companies to shift focus towards copper [4] - The rising significance of copper is also reflected in other industry activities, such as Anglo American and Teck Resources planning a $53 billion merger, which will also require Chinese regulatory scrutiny [4] - Rio Tinto is considering an asset-for-equity swap to reduce the 11% stake held by its largest shareholder, Chinalco, with assets of interest including the Simandou iron ore mine and the Oyu Tolgoi copper project [3]

Core Viewpoint - The potential merger between Rio Tinto and Glencore could create a significant player in the mining sector, valued at approximately $260 billion, enhancing their capabilities in copper and other metals markets amid rising demand and limited supply growth [7]. Group 1: Merger Discussions - Rio Tinto and Glencore are in preliminary discussions about a possible merger, which have gained traction following BHP Group's decision to rule out a competing bid [5]. - The merger talks reflect a broader trend of consolidation in the mining sector as companies seek to manage rising costs and tighter capital conditions [2][12]. Group 2: Market Dynamics - Demand for copper is increasing due to its applications in power grids, electric vehicles, and renewable energy systems, while supply growth is constrained by underinvestment and higher development costs [3]. - Copper prices have surged over 25% in the past three months, reaching record levels above $13,000 per tonne, with low inventories and rising production costs [10]. Group 3: Strategic Advantages - Glencore's strong commodity marketing and trading operations would provide Rio Tinto with capabilities it currently lacks, enhancing its competitive position in the copper market [1][11]. - The merger could allow for the separation of Glencore's coal assets, potentially unlocking shareholder value by focusing on a cleaner metals business [8][9]. Group 4: Regulatory Considerations - Any merger would face scrutiny from regulators in Australia and Europe, particularly regarding copper concentration and Glencore's trading business [15]. Group 5: Operational Differences - The operational models of Rio Tinto and Glencore differ significantly, with Glencore focusing on trading and risk management, while Rio emphasizes long-life mining assets [16].

Core Viewpoint - The diamond industry is experiencing a downturn, but the engagement ring of pop star Taylor Swift has sparked renewed interest in natural diamonds, potentially more than traditional marketing efforts [1][16]. Industry Overview - The global diamond business is facing challenges due to weak demand, geopolitical uncertainty, and the rise of lab-grown diamonds, which are cheaper and visually identical to mined stones [2]. - Lab-grown diamonds now represent over 50% of engagement rings sold in the US, with prices significantly lower than natural diamonds, sometimes by as much as 90% [3]. Market Impact - The resale value of lab-grown diamonds is considerably lower than that of natural diamonds, often dropping by up to 40% due to their mass-producible nature [4]. - Major players like Botswana have had to cut production and jobs due to falling revenues, with Debswana estimated to reduce output by 40% in 2025 [4]. - De Beers has stockpiled approximately $2 billion in unsold diamonds and has cut prices by over 10% in 2023, while also planning to reduce its workforce by more than 1,000 [5]. Celebrity Influence - Taylor Swift's engagement ring, featuring a large old-mine-cut natural diamond, has generated significant cultural interest, contrasting with the minimalist styles that have dominated recent trends [7]. - Other celebrities like Zendaya and Miley Cyrus have also contributed to the renewed attention on unique diamond styles, showcasing large stones with distinctive settings [9]. Shifts in Consumer Preferences - There is a noticeable shift in consumer preferences towards larger natural diamonds in fancy-cut shapes, with elongated fancy shapes becoming increasingly popular [12]. - The renewed interest in antique and heritage stones is driven by their uniqueness and the stories they carry, which lab-grown diamonds cannot replicate [10]. Marketing and Narrative Changes - The diamond industry is reframing its narrative to emphasize rarity based on character, age, and provenance, moving away from the traditional focus on flawless, colorless stones [11]. - The industry is leveraging celebrity influence and emotional storytelling to maintain relevance in a market where consumers prioritize price and purity [11][16].

Core Viewpoint - Rio Tinto and Glencore are in preliminary merger discussions to create the world's largest mining group, with a combined market capitalization of nearly $207 billion [1]. Group 1: Merger Discussions - The merger talks follow a trend of expansion and acquisition efforts in the mining industry, including the planned merger of Anglo American and Teck Resources, which aims to create a significant copper-focused entity [2]. - The current proposal involves an all-share acquisition where Rio Tinto would acquire "some or all" of Glencore, although details on asset inclusion remain sparse [3]. - Rio Tinto has until February 5 to either make a formal offer for Glencore or announce that it will not pursue the transaction, in accordance with UK takeover rules [4]. Group 2: Market Reactions - Investor reactions to the merger discussions have been mixed; Glencore's US-listed shares rose approximately 6% following the announcement, while Rio Tinto's shares on the Australian exchange fell by 6.3%, indicating investor skepticism about the deal [4]. - Hugh Dive, chief investment officer at Atlas Funds Management and a Rio Tinto shareholder, expressed concerns about the historical performance of major acquisitions in the mining sector, suggesting that such mergers often occur at market peaks and can be dilutive over time [5].