Commodities are entering 2026 on a firmer footing, with gold and copper supported by strong structural drivers and the potential for recovery emerging in oil and grain markets later in the year, according to Ninety One’s ‘Natural Resources Outlook’, published on January 19.
The outlook indicates that tighter conditions in key base metals, shifting dynamics in energy markets and an expected turn in agricultural balances are creating a more differentiated environment across natural resources, increasing the importance of selectivity.
Gold remains well-supported by a softer dollar, ongoing geopolitical risks and sustained demand from central banks. Expectations of interest rate cuts by the US Federal Reserve, combined with concerns over fiscal deficits, continue to underpin prices after two years of strong performance.
“Gold’s rally has been powerful, but it has also been grounded in fundamentals that are still very much in place. With real rates likely to fall and central banks continuing to diversify their reserves, we see more reason for gold to consolidate or edge higher than to sell off sharply,” Ninety One natural resources portfolio manager George Cheveley said.
At current price levels, gold miners’ margins are estimated to be four to five times higher than in 2024, reflecting improved cost discipline and higher realised prices. Silver has remained supported within the higher trading range established last year, while platinum continues to face a persistent market deficit, with supply well below demand and higher prices likely required to release stockpiled material.
Among base metals, copper remains the standout market. Prices reached new highs in 2025 as supply disruptions coincided with strong demand from power infrastructure investment and data-centre development, trends that remain in place at the start of this year.
“Copper is entering 2026 as the tightest of the major base metals. Supply disruptions have been widespread and inventories are low, while demand from power grids and data-centre infrastructure remains robust. Against that backdrop, we think copper-exposed equities still have an attractive risk-reward profile,” Cheveley said.
Aluminium has also started the year on solid ground, supported by demand growth and substitution away from copper, although capacity additions in Indonesia from 2027 are expected to weigh on the medium-term outlook.
Iron-ore and coal were broadly flat in 2025 and are expected to trade sideways this year as new supply from the Simandou project in Guinea ramps up and China’s centralised buyer, China Mineral Resources Group, takes a more active role in the market.
Despite this, longer-term expectations for iron-ore prices remain conservative relative to production costs and demand trends.
In energy, oil markets are facing near-term pressure as incremental supply from the Organisation of the Petroleum Exporting Countries (OPEC) is absorbed. Ninety One’s natural resources team has taken an underweight position in the sector at the start of this year owing to oversupply.
“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,” Ninety One natural resources portfolio manager Paul Gooden said.
Recent geopolitical developments in Venezuela have added uncertainty to the outlook.
“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,” noted Gooden.
Natural gas demand is viewed more positively, with growth supported by expanding liquefied natural gas (LNG) export capacity along the US Gulf Coast and rising electricity demand from data centres.
“Within our energy holdings we have exposure towards companies that are positioned to benefit from this structural growth in gas volumes, and to companies where we are ‘paid to wait’ for the eventual recovery in oil prices,” Gooden said.
In agriculture, grain markets are expected to tighten this year following oversupply in 2025, when record harvests in the US and other major producers lifted inventories. While stock levels have risen in those regions, inventories elsewhere remain moderate.
“Low grain prices are already discouraging planting, particularly on marginal land. Early indications in the US point to more fallowing and a shift towards alternative crops. If that trend continues, we expect corn and soybean balances to tighten by the second half of 2026,” Ninety One natural resources portfolio manager Dawid Heyl said.
Demand from biofuels and animal feed remains a key factor. The current US biofuel target implies higher ethanol production from 2025 to 2026, while strong livestock prices are expected to encourage herd rebuilding, supporting feed grain demand.
Positioning across natural resources reflects the varied outlook between sectors. The team is overweight precious metals, broadly at-weight in base metals and bulks, and underweight energy and agriculture.
“An active and highly selective approach is essential in this environment. The headline story for a commodity can look positive, but the range of outcomes at company level is wide. We want to be very deliberate about where we take risk, and ready to adjust as the year unfolds,” Gooden said.