Currently, there are two main themes in commodity trading—"de-dollarization" drives gold purchases, and "strong security" drives metal purchases.

The accumulation of macro risks in Western developed economies and the heightened global geopolitical environment are reshaping the commodity super cycle. According to a report released by the macro team of Li Chao at Zheshang Securities on the 6th, two clear trading themes are emerging in the current market: first, the replacement of reserve assets centered on "de-dollarization," and second, the stockpiling of key metals based on the "strong security" logic.

The report believes that, under the theme of reserve asset replacement, global central banks are accelerating the adjustment of reserve structures, not only reducing dependence on dollar assets but also viewing gold as a core tool for hedging sovereign currency credit risk. The buying by central banks has become the cornerstone supporting the long-term upward trend of gold prices, and the pricing logic of gold is gradually shifting from traditionally being driven by real interest rates to being dominated by official sector demand and geopolitical risk premiums.

Meanwhile, the global trend of strengthening security is re-pricing certain metal assets. Countries urgently need to stockpile key strategic materials to ensure military supply. The U.S. and its European allies have recently introduced policies to increase strategic metal reserves, resulting in supply-demand gaps for critical minerals such as tungsten, cobalt, lithium, etc. From January to November 2025, global basic metal prices rose by 15%, with tungsten up 229%, cobalt up 120%, and copper up 42%.

Based on this logic, investors should focus on two major directions in future asset allocation: on one hand, gold and related precious metals that possess independent value storage functions, to hedge against the volatility of the monetary credit system; on the other hand, key metals closely related to military demand, but with low correlation to the real estate cycle, in order to capture the structural premium brought by "strong security."

Central Banks’ Reserve Restructuring Supports the Gold Price Floor

According to Zheshang Securities, the global "de-dollarization" process provides structural support for gold. IMF data shows that as of Q3 2025, the dollar's share in global foreign exchange reserves had dropped to 56.92%, continuing a slow downward trend. In the context of high U.S. fiscal deficits and rising geopolitical risks, the primary consideration in reserve management has shifted from yield and liquidity to "whether it can be used at key moments."

Bloomberg data shows that Russia slashed its US Treasury holdings dramatically around 2018, falling from about $82.2 billion to nearly zero; Turkey’s holdings dropped from $82.4 billion to $14.6 billion by October 2025, down 82%. Within this framework, gold and digital currencies are both positioned in the narrative of replacing the dollar: gold, with its independent value storage function, provides a hedging tool, while digital currencies offer new paths for cross-border payments.

World Gold Council statistics show that global central banks added a net 1,089 tons of gold in 2024, marking three consecutive years of net purchases exceeding 1,000 tons. Survey results for 2025 indicate that 95% of central banks surveyed expect global central bank gold reserves to continue rising over the next 12 months. The impact of central bank buying on gold prices lies not just in the scale of purchases, but also in its alteration of market liquidity structure—long-term allocation continuously pulls away marginal supply, and when gold prices trend upwards under official buying, ETFs, asset managers, and hedge funds are more likely to follow the trend.

However, the report also highlights potential negatives for gold in the future: first, liquidity shocks caused by financial crises; second, a "Trump energy system restructuring" which may strengthen dollar credit through energy exports; third, a productivity revolution brought by robotics applications could trigger structural deflation; fourth, in the long term, controllable nuclear fusion technology could undermine the physical scarcity of gold.

National Security Theme Reshapes Metal Valuation

Since the start of this year, basic metal prices have significantly outperformed other global primary products. Zheshang Securities points out that, apart from AI computing infrastructure and anticipated Fed interest rate cuts, national military strengthening and strategic material stockpiling are currently underestimated key drivers.

Historical data shows that copper prices performed exceptionally well among major asset classes in the run-up to World War I and II. Currently, the U.S. has passed relevant laws to fund key minerals, and the EU and NATO member states have also expressed their intent to establish multinational reserves of key raw materials. This type of reserve demand driven by national security is often fulfilled through non-public channels such as targeted agreements, making traditional inventory statistics unable to fully capture the real demand gap.

According to this logic, China Merchants Securities believes that investment themes should focus on those varieties that are crucial for the military industry and minimally affected by the downturn of real estate:

Tungsten: About 8% of demand comes from the military field (e.g., armor), and supply is highly concentrated, affected by export controls and environmental restrictions, resulting in a clear supply-demand gap.Lithium and cobalt: As military equipment transforms from fuel-driven to unmanned and electrified, lithium and cobalt have become key energy elements for advanced weapon systems (such as drone swarms and exoskeletons).Molybdenum and tin: Nicknamed "military metals," they are widely used in aerospace, wear-resistant parts, and electronic soldering, and possess significant price elasticity under the national security theme.Copper and aluminum: These are basic military consumption items, with copper also being indispensable in the construction of AI data centers. If copper prices are too high or supply tight, aluminum has expansion potential as a substitute.Rare earths: As a key resource for modern industry and chip manufacturing, its price is highly sensitive to changes in major power rivalry and trade policies.

Zheshang Securities emphasizes that although metal prices have already partially priced in expectations of a technological revolution and monetary easing, the ongoing strategic material stockpiling due to normalization of geopolitical conflicts will provide new premium space for related commodities.

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