The metals rally has emerged as one of the standout themes in equity markets over the past year, with segments ranging from base metals to steelmakers delivering strong outperformance. However, market experts suggest this momentum requires careful segment-wise analysis rather than broad-based optimism.

Ashi Anand, Founder & CEO of IME Capital, emphasizes the need for granular evaluation across the metals space. "Actually, metals are really quite broad and you really need to break up metals into precious metals, some of the base metals, and even within base metals there are different underlying demand drivers for steel, for zinc, for copper, etc.," Anand explained in an interview.

Precious Metals Rally May Be Exhausted

Precious metals, particularly gold and silver, were among the strongest asset-class performers last year, driven by multiple factors:

Despite the strong momentum, Anand expresses caution about current precious metals valuations. "What you have seen in the precious metals pack and this gold and silver, where you have seen substantial up moves and were probably the big outperformers in terms of an asset class last year, has really moved up largely on account of geopolitical concerns, and a very large amount of this move does appear to be done," he noted.

The challenge lies in timing market peaks during strong bull runs. "In any very strong bull market, it is always very difficult to call the top of a bull market… very often towards the end of a bull market you still see very strong demand tailwinds. So on gold and silver, we are aware that there is extremely strong momentum, but we are a bit more cautious because you have already seen a very large part of the move," Anand added.

Industrial Metals Show Promise

The outlook becomes more constructive for certain industrial metals linked to technological advancement. Anand highlights specific opportunities:

"When it comes to metals, we are a little more positive on certain materials that go into electronics and electricals, so things like copper, to some extent aluminium, zinc at some level. What you are seeing is very strong AI capex that is going to come in over the next decade," Anand observed.

Copper faces particular supply-demand dynamics. "Copper has seen very significant mine shutdowns which has led to the very sharp rally that we have seen. As those mines come back, you should see copper settle down a bit," he explained, while noting that longer-term AI-driven demand remains supportive.

Steel Sector Faces Headwinds

Steel continues to present challenges due to demand concerns. "Steel is something we are a bit more cautious about. It is still very infra- or auto- or consumer goods- or housing-driven. The biggest market, which is China, you are not seeing very strong demand growth drivers coming in from there. Until you do get a lot more positive about the Chinese economy, we have a bit more of a cautious view on the steel pack," Anand stated.

IT Sector Presents Mixed Outlook

Anand draws clear distinctions within the IT sector, separating digital platforms from traditional services:

Digital Platforms Show Structural Growth

Indian digital platforms represent a long-term structural theme. "We believe that this is the theme for the decade. This decade is likely to see sustained value migration away from traditional businesses towards new-age digital tech firms. And as these companies continue to scale, we also see profitability and cash flows improving substantially," Anand explained.

Traditional IT Services Face Transition

Traditional IT services companies like Infosys and TCS face different dynamics. Near-term performance depends on US demand recovery, while AI presents both opportunities and challenges from FY27 onwards.

"As AI becomes a bit more mainstream, we are expecting fairly large enterprise-wide AI projects coming in where larger enterprises are trying to incorporate AI into their overall tech stack. We see Indian IT companies being very well positioned here," Anand noted.

However, AI adoption will also impact operational models. "AI is also going to be used quite substantially by these companies to increase the productivity of their labour force. Because they need to pass on some of these cost benefits to clients, this is likely to have a deflationary impact. You are therefore likely to see revenues possibly not grow as much, but improvement in margins, and therefore profitability should be decent," he concluded.

Silver prices achieved a historic milestone on Tuesday, reaching an unprecedented level of ₹2.72 lakh per kg, while gold maintained its position near record highs. The surge in precious metals reflects growing market uncertainty driven by recent geopolitical developments.

Silver Reaches New Peak

The white metal's climb to ₹2.72 lakh per kg represents a significant breakthrough, establishing a new record high for silver prices in the Indian market. This achievement underscores the metal's strong performance amid current market conditions.

Gold Maintains Strong Position

Gold prices remained stable near their record levels during Tuesday's trading session. The yellow metal continues to demonstrate resilience, holding its ground at elevated price points that reflect sustained investor interest in precious metals.

Geopolitical Factors Drive Market Movement

The price surge in both metals was primarily attributed to rising geopolitical uncertainty following the United States' decision to impose a 25% tariff on trade with any country conducting business with Iran. This policy development has created additional market volatility, prompting investors to seek refuge in traditional safe-haven assets.

The precious metals market continues to respond to international policy decisions, with both gold and silver benefiting from their traditional role as store-of-value assets during periods of economic and political uncertainty.