(Jan 26): Asian mining stocks climbed with metals prices as investors rotated into hard assets, driven by a weakening dollar and growing unease over currencies, geopolitics and global fiscal risks.
A group of materials producers led gains Monday (Jan 26) on MSCI Inc’s broadest index of Asia Pacific equities. Korea Zinc Co shares climbed as much as 14% in Seoul while Zhongjin Gold Corp’s jumped 10% in Shanghai. Markets were closed for holidays on Monday in Australia and India.
The advances mirror a powerful rally in metals markets, where gold, silver, copper and aluminium are climbing on what traders describe as a debasement trade. Investors are pulling away from currencies and Treasuries, seeking refuge in hard assets as concerns mount over fiscal largesse, geopolitics and the durability of US exceptionalism.
The rally in metals “is a long-term trend that we have been observing for several years,” said Frank Benzimra, head of Asia equity strategy at Societe Generale SA. Reasons include a diversification away from US assets and rising defence spending boosting demand for base metals along with AI-related needs.
The dollar fell Monday on heightened alert of Japanese government intervention to halt a slide in the yen — possibly with rare US assistance. Gold surged above US$5,000, continuing an uptrend from last week’s market turmoil over US President Donald Trump’s threats over Greenland and attack on the Federal Reserve’s independence.
See also: Tin’s rapid rally crashes to a halt after SHFE probes traders
Mining stocks have climbed with metals on safe haven appeal as well as demand for copper and other materials required for the AI buildout, yet they remain relatively cheap. The MSCI Asia materials gauge trades at 14.6 times forward earnings estimates, compared with 15.4 times for the broader index.
“We expect this year’s investment focus to be increasingly skewed toward commodities,” said Gerald Gan, chief investment officer at Singapore-based Reed Capital Partners. “We have reduced exposure to technology stocks and US Treasury bonds, with a portion of the proceeds already redeployed into mining companies and direct commodity positions.”
The Fed’s policy decision due Wednesday is among key watchpoints for global investors. While the central bank is widely expected to keep interest rates on hold, focus is on who will succeed Jerome Powell as chair — Trump is expected to announce his choice as soon as this week.
See also: Copper rises toward US$13,000 as dollar dips on Greenland tariffs
“Markets are clearly shifting into a ‘buckle-up ahead-of-the-next-storm’ mode,” said Hebe Chen, a senior market analyst at Vantage Global Prime pty. “In that environment, capital naturally looks for a stabilising, debasement-resilient anchor, lifting physical and physical-linked assets such as miners and metals.”
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