Q Big picture: how are commodity markets positioned today?
Commodities enter 2026 on a solid footing. Gold remains well supported by a softer US dollar, geopolitical risks and central bank demand. For precious-metals equities, gold miners’ cost discipline and improving margins also point to a positive outlook.
Copper is one to watch among base metals. Tight supply and firm demand from power and data-related infrastructure drove its price to new highs in 2025, and these trends remain intact. Aluminium could benefit from higher copper prices as market participants look for substitutes for copper. The iron ore and coal markets look steadier at the moment.
In energy, oil prices have been under pressure and may stay weak early in the year as incremental OPEC barrels are absorbed. However, we expect oil prices to find a bottom and recover as the market focuses on tighter medium-term supply/demand balances. The US intervention in Venezuela adds further uncertainty, but the long-term implications for the oil price are negative (see later in this outlook). Meanwhile, natural gas demand continues to grow. Finally, in agriculture, grain markets should tighten after 2025’s surplus, as lower planting and steady biofuel and feed demand improve the market balance.
Q Precious metals: can gold’s rally continue?
After two years of extremely strong performance in gold, investors are understandably asking whether the rally can continue. What we can say is that the key drivers of the gold price remain supportive: a softer US dollar, persistent geopolitical tensions, expectations of US Federal Reserve interest-rate cuts, growing concern over fiscal deficits, and continued central bank buying. Taken together, these factors suggest gold prices are likely to hold around current levels or edge higher rather than fall significantly.
As a result, gold miners should continue to benefit from strong margins, which at current gold prices are four to five times higher than in 2024. Silver also appears well supported at the higher trading range it entered last year, reinforcing a constructive outlook across the precious metals complex. Platinum, the top 2025 performer within precious metals, looks set for another strong year as the market remains in deficit, with supply shortfalls estimated to be c.10% of demand. This imbalance will likely require higher prices to encourage investors to release stockpiled material.
Q Base metals and bulks: which markets look most promising?
Base metals, particularly copper and aluminium, delivered strong gains in 2025, while iron ore and coal were broadly flat. Overall, we remain broadly positive on base metals and bulks, and valuations are undemanding in parts of this sector.
Copper stands out as the tightest of the major markets. Supply disruptions have been widespread, while demand should remain firm, supported by global power-infrastructure investment and a surge in data-centre construction. We expect to maintain an overweight position in copper-linked equities early this year, given historically low inventories and a forecast market deficit that could create a supply squeeze.
The aluminium market should start the year solidly supported, though capacity additions planned in Indonesia from 2027 are likely to weigh on the medium-term picture. We expect iron ore and coal to trade sideways through 2026 as the Simandou iron-ore project in Guinea ramps up and China’s centralised iron-ore buyer, China Mineral Resources Group (CMRG), continues to take a more active role in the market. But we believe consensus expectations for long-term iron-ore prices are too conservative.
Q Energy: when might oil find a bottom – and what’s driving natural gas demand?
Oil markets look oversupplied in the first half of 2026, and we enter the year with an underweight position in the sector and a defensive tilt within our energy holdings. Overall, we expect oil to find a bottom during the first half of 2026 and to recover later in the year as it becomes clear that both OPEC and US shale are operating near capacity. That could present an attractive entry point into oil‑leveraged equities. However, as we noted earlier, recent geopolitical events in Venezuela add further uncertainty. The near-term implications are ambiguous, but the long-term implications for the oil price are negative as Venezuela has significant untapped reserves, although it would take several years to develop them. That said, the implications for energy equities are nuanced, with for example select oil services companies and US refiners potential beneficiaries.
In contrast, the US natural gas market is buoyant. Demand continues to grow, supported by the expansion of liquefied natural gas (LNG) export capacity along the Gulf Coast and the increasing energy needs of data centres. Our exposure remains focused on companies positioned to benefit from this structural growth in demand.
Q Agriculture: can grains recover?
Global grain markets were oversupplied in 2025 following record harvests in the US and other major producing regions. While inventories have risen in these markets, stock levels elsewhere remain moderate, leaving us more optimistic about 2026. Current low prices are expected to discourage planting, particularly on less productive land. In the US, early indications suggest a shift towards alternative crops and higher levels of fallowing, which should lead to tighter balances in corn and soybeans by the second half of 2026.
From a demand perspective, the US ethanol mandate (a government requirement to blend ethanol, which is primarily produced from corn, into the fuel supply) may offer additional upside if clarity emerges on biofuel standards. The current target for total biofuel production, with ethanol as the largest component, represents a c.8% increase from 2025 to 2026. Also, strong livestock prices are likely to encourage herd rebuilding, supporting demand for feed grains. Together, these factors suggest a more favourable environment for select agricultural equities in 2026.
Q How are your portfolios positioned now?
At the time of writing, we are underweight energy and agriculture, overweight precious metals, and approximately at-weight in base metals and bulks. But as we have discussed, multiple dynamics are playing out in commodity markets at present, so it will be important for investors to remain ready to adjust allocations as conditions evolve during the year. And, as ever, an active and highly selective investment approach is key, because within each natural-resources sector we continue to see significant variation in asset quality, management expertise, operational resilience, business strategy and balance-sheet strength, as well as in political exposure and other external risk factors.
General risks. All investments carry the risk of capital loss. The value of investments, and any income generated from them, can fall as well as rise and will be affected by changes in interest rates, currency fluctuations, general market conditions and other political, social and economic developments, as well as by specific matters relating to the assets in which the investment strategy invests. If any currency differs from the investor’s home currency, returns may increase or decrease as a result of currency fluctuations. Past performance is not a reliable indicator of future results. Environmental, social or governance-related risk events or factors, if they occur, could cause a negative impact on the value of investments. No representation is being made that any investment will or is likely to achieve profits or losses similar to those achieved in the past, or that significant losses will be avoided. Individual companies or securities named in this material are included for illustrative purposes only. The views expressed are those of the contributor and do not necessarily represent Ninety One’s house view. The information should not be seen as a forecast of how such securities will perform and should not be construed as investment advice or a recommendation.
Specific risks. Equity investment: The value of equities (e.g. shares) and equity-related investments may vary according to company profits and future prospects as well as more general market factors. In the event of a company default (e.g. insolvency), the owners of their equity rank last in terms of any financial payment from that company. Geographic/Sector: Investments may be primarily concentrated in specific countries, geographical regions and/or industry sectors. This may mean that, in certain market conditions, the value of the portfolio may decrease whilst more broadly-invested portfolios might grow. Commodity-related investment: Commodity prices can be extremely volatile and losses may be made. Emerging market: These markets carry a higher risk of financial loss than more developed markets as they may have less developed legal, political, economic or other systems.
