Central banks are buying gold at double the old pace, so why did it just pull back from a record high? The answer isn't the one most people reach for. More from EasyAssetManagement
A follow-up to our latest webinar with CIO Shaun Krom, where we touched on commodities, how EAM thinks about commodities within themes and what they mean for investors. This blog unpacks that discussion in more detail.
Commodities have been a major focus for investors especially over the last year, both locally and globally. Precious metal producers make up a significant part of the JSE, which means moves in underlying spot prices carry real weight for how our whole market performs making them an important focus for the local investment industry. But not all commodities are the same, and they certainly don't all move the same way.
At EasyAssetManagement we don't think of commodities as one big bucket. We think about them thematically: what is the underlying thematic force actually driving demand for each metal? By thinking of it that way, you arrive at a very different result.
Two of the major themes in our framework intersect squarely in gold.
The multipolar world.
The deep interdependence between the major economic blocs, broadly the US and its allies on one side and China and its partners on the other, is unwinding. Countries increasingly want to depend on their own supply chains, their own manufacturing (commercial, industrial and military), their own energy, and their own reserves. Part of that last point means holding assets that no one particular government controls or influences.
The freezing of Russian sovereign assets after the 2022 invasion of Ukraine made the broader point vividly: reserves held in another country's currency and payment system can be blocked. Gold held in your own vaults cannot. It is likely no coincidence that central bank gold buying has roughly doubled since then, averaging around 1,000 tonnes a year over the past four years versus roughly 500 tonnes a year in the preceding decade.
That trend doesn’t seem to be going away. The World Gold Council’s annual central bank survey showed a record 45% of respondents said they expect their own gold reserves to increase over the next 12 months, and 89% expect global central bank gold holdings to keep rising. Nearly three quarters (74%) expect the US dollar's share of global reserves to be moderately or significantly lower five years from now. Notably, most responses came in after the Middle East conflict began.
Source: World gold Council Central Bank Gold Reserves Survey 2026
Gold is the classic asset investors flock to when the economic waters get choppy: a store of value and a hedge against currency depreciation and geopolitical shocks. This has historically driven the strong growth in gold exchange-traded funds (ETFs) and in physical bars and coins we have seen in the last year or so, with investment and central bank demand together now making up the largest share of gold demand, ahead of jewellery.
It is because gold sits squarely within both of these themes that we hold gold and gold miners within the South African sleeve of our EasyETFs Balanced Actively Managed ETF.
So why has gold corrected? Is it still shining?
Gold usually does well in times of conflict. It is the classic asset investors run to when the world gets scary. So with a war on in the Middle East, why has gold pulled back from its January record to trade near US$4,000?
This time, the conflict hit gold through the back door. The disruption to oil flowing through the Strait of Hormuz pushed energy prices, and with them inflation, sharply higher, with US inflation peaking at 4.2% in May. Higher inflation means central banks keep interest rates higher for longer, and that is the one thing gold dislikes most: gold pays no interest, so when rates rise, holding it becomes relatively less attractive and money rotates into assets that do pay a yield. A stronger dollar added to the pressure.
On top of all that, gold had an incredible run over the past 12 months and was the top-performing major asset class of 2025. After a rally like that, some profit-taking is healthy and normal.
The irony is that peace may be more bullish for gold than war: de-escalation would ease oil prices, cool inflation and put rate cuts back on the table. June's US inflation print, which fell after the ceasefire, may be the start of the journey towards stable and potentially lower rates in the US.
While the short-term dynamics have pressured gold, but the underlying structural trend, central bank accumulation and reserve diversification in a multipolar world, remains firmly intact.
Source: World Gold Council Gold Demand Trends: Q1 2026
Platinum group metals (PGMs) sit in our portfolio as part of our infrastructure theme. Their bread and butter is industrial: catalytic converters, chemical plants, glass manufacturing, real-world hardware that needs these metals to function. But in recent years PGMs have also become a popular investment in their own right, with money flowing in through ETFs, bars and coins alongside the industrial buyers. That investor money helped fuel a huge run through 2025 and record highs early this year, and it's also why, in part, when rising rates and yields knocked gold, PGMs got dragged down too.
For South African investors, PGMs are somewhat personal. We produce most of the world's mined PGMs by some margin.
We own PGM miners in the SA portion of our our EasyETFs Balanced Actively Managed ETF as part of our infrastructure theme. Strip away the trading noise and PGMs are workhorse industrial metals. Their biggest job is inside catalytic converters, the part of your car's exhaust that scrubs out harmful emissions, and they show up across industry too. And here's the kicker: for years now, the world has been using more platinum than it produces. Mines can't easily ramp up, and the above ground stockpiles that used to fill the gap have been steadily draining. This essentially means the platinum market is expected to remain tight for some time, which Is generally positive for long term prices
But what about electric vehicles, which don't need catalytic converters? The EV transition is real, but it's happening slower and more unevenly than the headlines suggest. Hybrids still need catalysts, the total number of cars built each year keeps growing, and new demand keeps showing up in unexpected places, including in certain hardware segments supporting artificial intelligence (AI), where PGMs feature in components like glass fibre and hard drives.
Short version: sentiment is cloudy, but the underlying story hasn't changed. Prices wobble; the shortage doesn't.
Source: World Platinum Investment Council
Copper brings together three of the biggest themes of the decade: infrastructure, energy and AI. It's the metal that quietly makes modern life work, sitting in your home's wiring, the power grid, electric cars, and the data centres running artificial intelligence (AI). Most of the world's copper goes into anything that carries electricity, and for those jobs there's simply very few practical substitutes. That's why demand keeps climbing: electric vehicles use several times more copper than petrol cars, and AI data centres are far hungrier for power, and therefore copper, than the ones that came before.
The market has noticed. The copper price is up sharply over the past year.
What makes this a long-term story rather than a passing spike is the supply side. Copper is getting harder and more expensive to dig out of the ground. The quality of ore in existing mines has been falling for years, so miners have to move far more rock to get the same amount of metal. Genuinely large new deposits have become rare, and even if one is found, a new mine takes years to reach production.
Recycling will become increasingly important, but it cannot solve the near-term supply challenge on its own. Much of the world’s copper is locked inside buildings, cables and electricity grids for decades before it becomes available for recycling. Meanwhile, new mines are may not be discovered and developed quickly enough to keep pace with where demand is heading.
Reflecting this, we hold copper exposure through diversified miners with significant copper exposure in the South African equity portion of our Balanced Fund. We believe the long-term supply and demand dynamics continue to support the investment case.
Here's the thread running through all of this. We don't invest in commodities as one big bet on "metals going up." We invest behind a handful of powerful, long-running themes, and we hold the metals that give us exposure to them.
Gold is our clearest expression of the shift towards a more multipolar world, where central banks are rebuilding their reserves and investors continue to turn to gold as a safe haven. Copper is our electrification and infrastructure play, benefiting from the growing demand for power grids, electric vehicles and AI data centres. PGMs reflect a broader industrial theme, with demand spanning emissions control, industrial applications and emerging technologies. Those themes are the real engine. The day-to-day drivers will keep prices bouncing around in the short term, as they have for gold and PGMs this year. But it's the themes that decide where these markets ultimately go, and it's the themes we're positioned for.
If you are looking for exposure to global equities, AI-themed opportunities, or a balanced investment strategy check out our EasyETFs Global Equity Actively Managed ETF, EasyETFs AI World Actively Managed ETF and EasyETFs Balanced Actively Managed ETF.
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