Markets are signaling a renewed appetite for hard assets in early 2026, with energy, metals and industrial commodities rallying. This article reviews recent performance, examines geopolitical and structural drivers — from Venezuela tensions to AI-driven demand for metals — and considers whether these forces could mark the start of a sustained commodities supercycle.
“Market evidence and recent performance”
The start of 2026 has favored tangible investments. Materials and energy sectors within the S&P 500 have gained ground, with materials up 6.4% and energy up 4.3% so far this year. Precious metals have been especially strong: gold and silver rose about 3.7% and 12.4% in January alone, after outsized gains through 2025 (roughly 64% and 141%). Brent crude is also higher, up roughly 4.1% this month despite oversupply worries.
“Geopolitical shocks and supply risks”
Geopolitical uncertainty is a clear catalyst. Recent U.S. military action in Venezuela and the attempted ouster of Nicolás Maduro injected fresh volatility into energy markets. Venezuela still claims the world’s largest oil reserves, and even modest supply disruptions or the threat of further action add a risk premium to prices. Market nerves remain elevated as traders weigh potential follow-on events in a historically unstable region.
“Structural demand drivers: AI, energy needs and inflation”
Beneath headline geopolitics, deeper structural shifts are boosting commodity demand. The AI buildout — massive expansions of data centers and computing infrastructure — requires huge volumes of industrial metals, especially copper. Copper has surged near record highs, crossing about $6 per pound amid tight supply and rising tech demand. Natural gas is also benefitting from the energy intensity of these facilities.
Meanwhile, inflation and concerns about dollar weakness support precious metals as a store of value. Hard assets historically hedge purchasing-power erosion, and investor worries about sustained fiscal deficits and currency debasement have strengthened demand for gold. Expectations of easier central-bank policy (interest-rate cuts) further lower the opportunity cost of holding non-yielding assets like gold while stimulating activity that raises industrial-materials demand.
“Outlook, risks and what to watch next”
While parallels to past supercycles are striking — technology-driven demand, geopolitics, and accommodative monetary policy — a true supercycle is clear only in hindsight. Near-term data will matter: upcoming releases on inflation (CPI), retail sales and producer prices will help determine whether this rally has staying power.
For now, relative valuations between equities and commodities suggest potential entry points for investors. Hard assets are being viewed as offering resilience amid geopolitical uncertainty, technological transformation, and lingering inflation concerns. Whether a full-fledged commodities supercycle unfolds, the case for commodities in 2026 looks materially stronger than it did a year ago.
