October 5, 2026
Gold is holding up surprisingly well despite high bond yields, while silver is losing its fundamental support - but Deutsche Bank currently sees copper as offering the greatest upside potential in the metals sector. Its analysts believe the red industrial metal is facing its most severe shortage since the 1980s. While this supply crunch has made copper the favorite, a closer look at precious metals reveals a major fundamental shift that investors need to understand now.
Deutsche Bank analysis: Gold defies yields as a portfolio anchor
The current macro environment should actually be toxic for gold: U.S. Treasury yields are above 5 percent, crude oil costs more than US$100, and the Federal Reserve is tightening monetary policy. Nevertheless, the precious metal has not set a new low since July. Deutsche Bank views this remarkable resilience as a clear sign of strength. The reason lies in a major market shift: Central bank purchases have more than doubled compared with 2021, while the network of institutional gold investors has grown by a substantial 70 percent.
For large institutional investors such as pension funds and insurers, gold is no longer merely an alternative to bonds, but an essential diversification tool. As many alternative asset classes remain sensitive to interest rates, the bear market in government bonds in particular is driving new capital into gold as a safe haven. According to Deutsche Bank, the setup for investors is extremely attractive: Market positioning is historically low, making the precious metal appear undervalued and “under-owned” at present.
Silver market shifts into oversupply
According to the analysts, the situation in silver is quite different. While the market was still considered historically tight last year—comparable to the era of the Hunt brothers—they now believe that gold’s little brother is rapidly losing fundamental support. Ghali expects the silver-gold ratio to weaken significantly, driven by three key headwinds:
- Rising inventories: Freely available inventories in commercial London vaults have reached their highest level since November 2024. The Comex in the US and Shanghai are also reporting sharply rising inventories again.
- Demand destruction: The extremely high prices seen recently have taken their toll. Industrial silver demand from China’s solar sector alone is expected to fall by around one-third year over year in 2026.
- Potential supply surplus: The shrinking deficit could turn into an actual physical supply surplus as early as next year.
Conclusion: Simply extrapolating last year’s trends no longer works. While the fundamental outlook for silver is becoming increasingly cloudy, Deutsche Bank currently sees a significantly stronger risk-reward profile for gold as a strategic portfolio anchor and copper as an industrial metal facing extreme supply constraints.
Source：https://goldinvest.de/en/deutsche-bank-historic-copper-shortage-gold-outperforms-silver
