Against a backdrop of escalating geopolitical friction and the restructuring of global supply chains, the commodity market is undergoing a profound paradigm shift.
According to reports, major global economies are transitioning from the "just-in-time" supply chain model relied upon for decades to a "just-in-case" hoarding model, regardless of cost. The core of this shift is that countries are no longer content with maintaining minimal commercial inventories but are instead beginning to build strategic reserves on a large scale to counter potential risks of war, shipping disruptions, or geopolitical blockades. This intense craving for security is reshaping the supply and demand dynamics for a wide range of commodities, from oil to rare metals.
Within this trend, energy and strategic metals have become the focal points of hoarding. Michael Haigh, Global Head of Commodities Research at Société Générale, pointed out that a certain nation may have already stockpiled approximately 1.4 billion barrels of oil, a "massive" volume sufficient to last for hundreds of days in the event of a complete supply chain disruption, far exceeding the international norm of 90 days. Simultaneously, driven by a "hard security" logic, prices for critical military-industrial metals like tungsten and cobalt have experienced extreme volatility. Data from Zheshang Securities indicates that by 2025, the price increases for tungsten and cobalt had reached 229% and 120%, respectively.
Market analysts note that this change signals the establishment of a new primary trading theme for investors. On one hand, there is gold allocation centered around "de-dollarization," and on the other, a long-position logic for metals based on national security needs. As central banks adopt gold as a core tool for hedging credit risk and defense budgets surge—such as a proposed 50% increase in the US defense budget to $1.5 trillion—the commodity market is entering a new cycle dominated by geopolitical premiums.
From "Just-in-Time" to "Just-in-Case"
In a global environment of low trust, efficiency has yielded to survival. A Bloomberg columnist noted that the era of holding US Treasury bonds, earning interest, and being confident that one could always buy needed goods with dollars is over. The current logic is: one must possess the physical assets, and one must possess them now.
This logic is particularly evident in oil reserves. Michael Haigh analyzed that a certain country may not only possess around 1.4 billion barrels of oil reserves but might even plan to increase them to 2 billion barrels.
The United States is also strengthening its energy security. Despite having a Strategic Petroleum Reserve (SPR) and being a net exporter, the definition of "enough" has been rewritten in the face of crises. US actions regarding Venezuela and its interest in Greenland's resources reflect attempts to establish long-term, absolute security advantages by controlling resource-producing regions.
"Hard Security" Logic Reshapes Metal Valuation
The scope of hoarding extends far beyond energy. If oil concerns energy security, then industrial and rare earth metals concern economic and national security.
Michael Haigh proposed a key hypothesis: if countries that import nickel, zinc, lead, aluminum, silver, and copper decide to hoard these metals like they hoard oil, prices would "fly to the moon." In fact, due to underinvestment over the past decade, many metal markets are already in a deficit.
Further reports corroborate this trend. A Zheshang Securities report pointed out that strategic stockpiling driven by "hard security" is fueling a revaluation of military-industrial metals. From January to November 2025, global base metal prices rose by 15%, but the increases for varieties closely tied to military demand were staggering: Tungsten (armor material): up 229% Cobalt (energy for drones/exoskeletons): up 120% Copper (AI data centers/basic military supplies): up 42%
Beyond traditional industrial demand, factors like AI infrastructure build-out, grid expansion, and the surge in defense budgets (the US plans an increase to $1.5 trillion) are exacerbating supply-demand tensions.
Central Bank Gold Buying Spree and De-dollarization
Beyond physical commodities, the role of gold as a reserve asset is undergoing a fundamental change.
Analysis suggests the global "de-dollarization" process is reshaping the pricing logic of gold. IMF data shows the US dollar's share of global foreign exchange reserves has fallen to 56.92%. Against the backdrop of rising US debt credit risk and geopolitical sanction risks, central banks are accelerating the shift of reserve assets from dollars to gold.
Michael Haigh noted that many central banks aim to increase the proportion of gold in their reserves to 20%. Most are still far from this target. He calculated that if the under-reserved nations among the world's top 50 central banks increased their gold reserve ratio by just 1%, it would be enough to push the gold price up by approximately $1,000.
Zheshang Securities believes gold's pricing logic has shifted from being driven by traditional real interest rates to being dominated by official sector demand and geopolitical risk premiums. 95% of surveyed central banks are expected to continue increasing their gold holdings, creating a foundation for medium to long-term price appreciation.
What Does This Mean for the Market?
For the market, this shift in macro narrative carries direct investment implications.
Analysis suggests investors need not engage in complex physical hoarding themselves but should focus on related capital market opportunities. European defense stocks and commodity ETFs are effective tools for diversification. Notably, the FTSE 100 index recently hit the 10,000-point milestone; composed mainly of mining, oil, and defense stocks, this underscores that market capital is flowing towards "hard assets."
In contrast, former tech darlings like Nvidia have underperformed various mining stocks in 2025, with their stock price down nearly 10% from its peak. This indicates a potential shift in market sentiment.
Furthermore, gold mining stocks are also beneficiaries. All 313 gold miners tracked by Wood Mackenzie are achieving record profits at current gold prices. It is recommended that investors focus on gold, which possesses an independent store of value function, and key metals closely tied to military demand but less burdened by the real estate cycle.
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