Fund manager Tapan Patel advises an allocation framework directed 50% toward gold, 30% toward copper, and 20% toward silver for long-term commodity resilience. While precious metals face headwinds from a firm dollar and hawkish monetary policy, industrial materials remain anchored by structural transitions. Copper, in particular, is positioned to benefit from substantial demand drivers including artificial intelligence infrastructure, electrification projects, and potential trade tariffs. Meanwhile, energy markets remain tight as ongoing U.S.-Iran geopolitical conflicts continue to generate supply disruptions.
Key points
Tata Asset Management suggests structuring commodity portfolios with a 50:30:20 distribut…: Tata Asset Management suggests structuring commodity portfolios with a 50:30:20 distribution across gold, copper, and silver.
Commodities are increasingly trading on specific structural fundamentals rather than hist…: Commodities are increasingly trading on specific structural fundamentals rather than historically uniform sector correlations.
Long-term copper demand remains underpinned by electrification initiatives, artificial in…: Long-term copper demand remains underpinned by electrification initiatives, artificial intelligence infrastructure, and projected structural supply deficits.
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While gold has come under pressure from a stronger US dollar and higher US bond yields, copper continues to draw support from its long-term demand prospects, driven by electrification, AI infrastructure and the energy transition.
So, should investors look beyond gold to diversify their commodity exposure? And how should they position their portfolios for the next five years?
In this edition of ETMarkets Smart Talk, we speak with Tapan Patel, Fund Manager – Commodities at Tata Asset Management, who shares his outlook on gold, silver, copper and crude oil, explains the changing dynamics driving commodity prices, and suggests a 50:30:20 allocation to gold, copper and silver, respectively, for investors looking to build a commodity portfolio for the long term. Edited Excerpts –
Q) October has been a month of sharp divergence across commodities. What has been the biggest driver behind the contrasting moves in gold, crude oil and copper?
A) We have seen non-linearity amongst commodities this year as commodities are following individual fundamentals apart from general correlation. The biggest driver for this divergence is shift in investors positioning due…
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