(Kitco News) - Precious metals prices are setting new records, and Neil Adshead, consultant analyst at the Commodity Discovery Fund, says the rally is rooted in powerful structural drivers. “A bigger driver is still this move of non-US central banks, encouraged to own less US Treasuries and own more physical bullion,” Adshead told Kitco Mining’s Digging Deep. “The marginal buyer is these central banks.”
Silver is showing signs of decoupling from gold as industrial demand takes the lead, with Ashead explaining that “almost 60% is currently used in industrial applications.” He noted the metal’s dual nature as both a store of wealth and a key input for solar, electrification, and advanced technologies.
Reflecting on last month's Precious Metals Summit in Beaver Creek and Mining Forum Americas in Colorado Springs, Adshead said a clear shift in tone has emerged. “There’s clearly a switch now from the focus on returning excess capital to shareholders to focusing on growth initiatives,” he said, which is typical of a warming bull market for equities.
Turning to copper, Adshead discussed the setbacks at Freeport’s Grasberg mine after a mudslide dumped 800,000 tons underground in early September. “This is not going to be a quick fix. This is going to take many months to rectify,” he said, adding that output may not recover until 2027. The disruption has already lifted copper above US$10,000 per tonne, tightening supply and supporting developers with large-scale projects.
Critical minerals policy is also reshaping the landscape, with the U.S. government offering funding, floor prices, and even equity stakes in strategic projects. Adshead said such moves could change how boards allocate capital. “Sometimes somebody could argue it’s going a little bit Soviet,” he said. “It feels a bit like early signs that we’re already in the new Cold War with China.”
Watch on the Kitco Mining YouTube channel here: Catch the full, unedited conversation where Neil Adshead explains central bank gold demand, silver’s industrial leverage, copper supply shocks, and how U.S. policy is reshaping the critical minerals market.