Commodities have entered 2026 on firm ground, as asset manager Ninety One Plc (OTC:NINTF) highlights gold and copper as the most compelling opportunities within the sector.
In the Natural Resources 2026 Outlook, the firm argues that structural demand drivers, constrained supply, and sharply improving mining margins present a constructive outlook. Still, they note volatility as a defining feature of the asset class.
Leading Opportunities
With supportive macro conditions, gold remains in focus. A softer US dollar, elevated geopolitical risk, expectation of lower real rates, and ongoing central bank purchases all provide a solid foundation. Furthermore, price strength is translating directly into profitability for gold equities, as margins expand much faster than underlying costs.
"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," said portfolio manager George Cheveley.
As a result, the firm sees selective gold miners as well-positioned, given their highly expanded margins and strong cash generation.
Price Watch: VanEck Gold Miners ETF (NYSE:GDX) is up 13.43% year-to-date.
Meanwhile, copper leads Ninety One's base metals outlook. Owing to supply disruptions, low inventories, and rising demand for data centers and power grids, prices have pushed sharply in 2025, and those pressures have not gone away.
Cheveley describes copper as the tightest of the major base metals heading into 2026, arguing that the balance between supply and demand still favours producers. He also sees a tailwind for aluminum, as substitution demand for copper kicks in. Still, longer-term capacity additions could temper the upside beyond the near future.
Bottoming Energy Market
The firm is cautious in the near term as the oil market absorbs incremental supply. Yet, it expects the conditions to improve later in the year, owing to diminishing spare capacity.
"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," said portfolio manager Paul Gooden. He added that while geopolitical developments, including in Venezuela, add uncertainty, select energy equities could benefit as the cycle turns.
Price Watch: State Street Energy Select Sector ETF (NYSE:XLE) is up 6.67% year-to-date.
The asset manager is also positive on select agricultural equities, expecting the tightening grain market. Lower prices are already discouraging planting in some regions, while demand from biofuels and livestock feed remains resilient, setting the stage for improving balances.
Selectivity, Flexibility, and Volatility
The firm is positive on commodity momentum, focusing on gold and copper as high-momentum plays. Furthermore, it sees future opportunities in energy and agriculture. Still, it cautions about two main factors: high selectivity and flexibility to adjust as stories develop.
The recent movement in the tin market is probably the best example of such a dynamic. Its price on the London Metal Exchange (LME) has rallied by over 30% year to date, hitting a high of $54,760 per ton on Wednesday.
Yet, despite a heavily concentrated market, tin supply has been improving in recent months. At the time of the previous 2022 price peak, LME inventories were under 5,000 tons, while they have risen from 11,000 to 19,000 since October.
"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 the company level is wide," Gooden concluded.
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