Commodity Markets: Investing in Raw Materials

The year 2026 is poised to be a transformative period for commodity investors, marked by resilience and innovation.

Global markets are set to benefit from multiple positive trends, reshaping how we think about raw materials.

This guide explores key sectors and strategies to help you navigate this evolving landscape with confidence.

The Optimistic Outlook for 2026

After periods of volatility, commodity markets are entering a phase of stability and growth.

The primary driver is the global energy transition, which is redirecting unprecedented capital flows.

This shift creates opportunities across energy, metals, and agriculture, fostering a hopeful sentiment.

Investors can leverage these trends for diversification and long-term gains.

Energy Sector: Oil, Gas, and Clean Tech

The energy landscape is undergoing a dramatic transformation, with lower fossil fuel prices easing inflation.

Oil and gas markets have abundant supply, leading to softer pricing in recent years.

• Brent crude oil is forecast to average $62 per barrel for Q2-Q4 2026.
• Recovery is expected in the second half of 2026, driven by solid demand growth.
• Lower energy costs act like a tax cut, boosting global economic consumption.

Electric vehicles are revolutionizing transportation, with over 20 million EVs sold in 2025.

This rapid electrification reduces long-term oil demand but spurs new needs for metals.

Investment in clean energy is surging, with a record $3.3 trillion set for 2025.

• Roughly two-thirds goes into clean energy technologies like renewables and energy storage.
• Solar power alone attracts around $450 billion annually, leading all energy sectors.

Uranium prices are projected to reach $100 per pound by end-2026, supported by nuclear energy growth.

Industrial Metals: Copper, Aluminum, and More

Industrial metals are critical for modern infrastructure and green technologies.

Copper faces strong demand from renewable energy and AI/data centers.

• UBS projects global copper consumption to grow by 2.8% in both 2025 and 2026.
• Citi's base case sees a $12,000-per-ton price, with bull case up to $14,000 per ton.
• Supply shortages may push prices higher, highlighting investment potential.

Aluminum is essential for lightweight vehicles and grid equipment.

Citi forecasts a 30% upside in the base case and 50% in the bull case by 2027.

Other base metals like tin are positioned for solid demand, offering broad stability.

Precious Metals: Gold and Silver's Shine

Precious metals have been standout performers, with gold hitting all-time highs.

UBS expects gold prices to rally to USD 5,000/oz by March 2026.

• Central bank buying has more than doubled since 2022, providing strong support.
• Geopolitical risks and inflation fears increase allocations to safe-haven assets.
• Lower US real interest rates decrease the opportunity cost of holding gold.

Silver has jumped significantly alongside gold, with the bull market expected to continue.

These metals offer a hedge against uncertainty and monetary policy shifts.

Agricultural Commodities: Stability and Growth

Agricultural markets have entered a period of relative stability after early 2020s volatility.

Strong harvests and improved logistics have made food prices more affordable.

• Grain prices like wheat and corn have likely bottomed, but may face downward pressure.
• Coffee prices are expected to settle below $3 per pound, down ~25% from current spots.
• Long-term demand rises with global populations and diversifying diets in emerging markets.

New uses for crops, such as biofuels, add growth avenues for savvy investors.

Market Dynamics and Strategic Investment

Global growth is expected to improve in 2026's first half, driven by policy measures.

Lower fossil fuel prices help ease inflation, providing economic relief worldwide.

Geopolitical conflicts, like those in Ukraine, persist and can drive price spikes.

This environment requires careful portfolio allocation to manage risks.

Investment Strategy Considerations

Commodities can play a valuable role in portfolios by providing diversification.

UBS recommends up to 5% allocation to a diversified commodity index when outlook is favorable.

• Focus on sectors with structural growth, such as clean energy and industrial metals.
• Monitor supply-demand imbalances and geopolitical events for timing entries.
• Use precious metals as a hedge against inflation and market uncertainties.

Stable agricultural prices mean less risk, but opportunities exist in specific commodities.

By understanding these dynamics, investors can build resilient and profitable portfolios.

Embrace the hopeful trends of 2026 to secure your financial future with raw materials.