Commodities are set to start 2026 on a stronger foundation. Gold and copper are supported by solid long-term trends, while there’s potential for recovery in oil and grain markets later in the year, according to Ninety One’s ‘Natural Resources Outlook’ released on January 19.
The report notes that tighter supply in key base metals, changing energy market dynamics, and an expected shift in agricultural balances are creating a more varied environment across natural resources, making careful selection increasingly important.
Gold continues to benefit from a weaker dollar, ongoing geopolitical risks, and steady central bank demand. Anticipated interest rate cuts by the US Federal Reserve, paired with concerns over fiscal deficits, also help sustain gold prices after two years of strong performance.
“Gold’s rally has been impressive and is still underpinned by strong fundamentals,” said George Cheveley, portfolio manager at Ninety One Natural Resources. “With real rates likely to decline and central banks diversifying reserves, we see more reasons for gold to stabilize or rise than for a sharp sell-off.”
At current prices, gold miners’ profit margins are estimated to be four to five times greater than in 2024, thanks to better cost management and higher sale prices. Silver has stayed within its higher trading range established last year, while platinum faces a persistent supply shortfall, pushing prices up as demand outpaces available material.
Among base metals, copper stands out. Prices reached new highs in 2025 due to supply disruptions and robust demand from investments in power infrastructure and data centers—a trend continuing into this year.
“Copper enters 2026 as the tightest of the major base metals. Supply has been disrupted and inventories remain low, while demand from power grids and data center infrastructure stays strong. In this context, we continue to see copper-related stocks as offering attractive risk-reward,” added Cheveley.
Aluminium has also started the year positively, backed by rising demand and a move away from copper, though increased production capacity in Indonesia from 2027 may weigh on medium-term prospects.
Iron ore and coal had flat performances in 2025 and are projected to remain steady this year, as new supply from the Simandou project in Guinea ramps up and China Mineral Resources Group becomes more active in the market. Despite these factors, long-term outlooks for iron ore prices remain cautious compared to production costs and demand.
In the energy sector, oil markets face near-term pressure from extra OPEC supply. Ninety One’s team has adopted an underweight position in oil at year’s start due to oversupply.
“We expect oil to bottom in the first half of 2026 before recovering later in the year, as it becomes clear that both OPEC and US shale producers are nearing capacity. This could create an appealing entry opportunity for oil-linked equities,” said portfolio manager Paul Gooden. He also noted that geopolitical developments in Venezuela have created uncertainty: “While the immediate effects are unclear, the long-term impact on oil prices may be negative since Venezuela has untapped reserves, though developing them would take years. For energy stocks, the implications are nuanced—some oil service companies and US refiners could benefit.”
Natural gas demand looks more positive, aided by expanding LNG export capacity along the US Gulf Coast and higher electricity needs from data centres. “Within our energy holdings, we favour companies positioned to benefit from growth in gas volumes, and others where we can wait for oil price recovery,” Gooden said.
On the agricultural side, grain markets are expected to tighten in 2026 after a year of oversupply in 2025. Record harvests in the US and other big producers boosted inventories, but levels elsewhere remain moderate.
“Low grain prices now discourage planting, especially on marginal land. Early signs in the US point to more fields left fallow and shifting toward alternative crops. If this trend persists, corn and soybean supplies should tighten by the second half of 2026,” said Dawid Heyl, portfolio manager at Ninety One Natural Resources.
Demand for biofuels and animal feed will remain important. Current US biofuel targets suggest higher ethanol output from 2025-26, while strong livestock prices are likely to encourage rebuilding herds, supporting feed grain demand.
The team’s positioning reflects the diverse outlook across sectors: they are overweight in precious metals, broadly neutral in base metals and bulk materials, and underweight in energy and agriculture.
“Being active and highly selective is crucial in this environment. The headline story for a commodity might look good, but company-level outcomes can vary widely. We’re focused on careful risk-taking and staying flexible as the year progresses,” Gooden concluded.