Will colored metals plunge? Don’t panic—this is a “wrong trade”!

Over the past couple of days, the market has fallen; especially gold, copper, and aluminum have led the sell-off. Many people are panicking: has the logic changed?
Don’t rush. The market is now trading on the idea that “the Federal Reserve will raise interest rates”—because inflation has rebounded, the dollar has strengthened, and commodities have been hammered.
But this logic is very likely to be like “carving a boat to seek a sword.”
In the past, inflation was driven by demand that was too strong, and rate hikes could cool it down. What about now? Inflation is caused by the oil prices pushed up by war—cost-push inflation. It’s not that consumption is too hot; it’s because it’s being fought out in the Middle East!
Can interest rate hikes end the war? Can they open the Strait of Hormuz? They can’t.
Instead, now the valuations of the U.S. stock market and the AI sector are all built on “rate-cut expectations.” If you really dare to raise rates, the U.S. stock market would crash first—fiscal risks and bubbles would get pierced—so the Federal Reserve wouldn’t dare at all!
So, this time the plunge in colored metals isn’t a fundamental reversal; it’s a sentiment-driven wrong trade.
More importantly: the logic for copper and aluminum has changed. They are no longer ordinary industrial metals. Instead, they are strategic resources in the era of AI, new energy, and electric vehicles—building data centers, upgrading power grids, and increasing renewable energy penetration all depend on copper and aluminum. In the future, pricing will be determined by scarcity, not by the whims of the dollar.
In one sentence: U.S. inflation can’t be solved by rate hikes—it can only be solved by ending the war. And the long-term logic for copper and aluminum hasn’t changed!
⚠️ Personal views only, not investment advice. The market is risky, so decisions should be made carefully.
What do you think—was this a case of overreaction, or a true reversal? See you in the comments!