Deutsche Bank’s latest Global Mining & Commodities Survey reveals a shift in investor sentiment, with gold emerging as the preferred metal in the near term. While decarbonization remains a key driver for commodity demand, concerns about a slowing Chinese economy have led to a decrease in investor conviction for the energy transition’s impact. This has resulted in a growing preference for earlier cycle commodities like iron ore and coal.
Despite remaining the consensus long-term pick for copper, investors are wary of potential slowdowns in electric vehicle and renewable energy adoption, and the threat of substitution. This has contributed to the preference for gold in the near term. The survey also highlights a growing belief that supply constraints may be easing, with 20% of respondents anticipating sufficient supply to meet future decarbonization needs. Additionally, 73% expect an increase in major project approvals for metals like copper in the next year.
Deutsche Bank highlights that ESG remains a focus, with decarbonization efforts driving a more positive perception of the mining sector for some investors. However, local environmental concerns persist, with water stress, community relations, and carbon emissions gaining importance. The report concludes with a prediction of continued M&A activity, with Anglo American and Teck Resources seen as potential takeover targets in the next three years.