2026 Commodities Outlook: Metals Outperform Energy Amid Policy Uncertainty and Structural Shifts

The 2026 commodities landscape is poised for a stark divergence between base metals and gold, which are expected to outperform energy markets amid shifting macroeconomic dynamics. Structural demand from industrialization, artificial intelligence (AI) infrastructure, and central bank policies is fueling optimism for metals, while energy faces headwinds from oversupply and weak demand growth. This divergence presents a compelling case for contrarian positioning in base metals and gold, contrasting with the bearish outlook for energy.

Base Metals: Supply Constraints and Structural Demand Drive Resilience

Base metals, particularly copper and aluminum, are entering a new price cycle driven by supply bottlenecks and surging demand. Copper, the "new oil" of the energy transition, is projected to surpass $11,000 per ton in 2026 as mine disruptions and geopolitical tensions tighten supply. J.P. Morgan highlights that structural demand from AI development and infrastructure spending is creating a "hard-to-replicate" shortage scenario according to research. Canaccord Genuity forecasts copper prices to climb to $5.19 per pound in 2026, up from $4.85 per pound in Q4 2025.

Aluminum is also gaining traction, with China's production caps and high energy costs in Europe and North America creating a tight market. Citi Research anticipates a 30–50% price increase by 2027, driven by decarbonization and AI-related demand. Nickel and iron ore, however, remain under pressure due to surpluses and declining demand from the electric vehicle (EV) sector according to analysis.

Gold: A Safe Haven in a Volatile Macro Environment

Gold's ascent in 2026 is underpinned by central bank demand, falling U.S. interest rates, and geopolitical risks. The World Gold Council outlines scenarios where gold could gain 15–30% in a global downturn or 5–20% in a reflationary environment according to their outlook. J.P. Morgan forecasts gold prices to average $3,675 per ounce in Q4 2025 and climb toward $4,000 per ounce by mid-2026 according to their research. Central banks, particularly in emerging markets, continue to accumulate gold as a hedge against currency volatility and fiscal strain according to UBS analysis.

UBS argues that gold's appeal will persist as real interest rates decline and global policy uncertainty lingers according to their view. However, Citi Research adopts a more cautious stance, projecting a neutral to bearish outlook for gold in 2026 despite its 2025 gains. This divergence reflects the tension between gold's traditional role as a safe haven and its exposure to shifting monetary policy.

Energy: Oversupply and Weak Demand Fuel Bearish Sentiment

Energy markets, particularly oil, face a challenging outlook. OPEC+'s increased output and stagnant U.S. production have exacerbated a global oil surplus. J.P. Morgan forecasts Brent crude to average $62 per barrel in 2026, with a bear case of $50 and a bull case of $75 according to their analysis. Citi Research aligns with this, noting that weak demand growth and geopolitical stability are capping prices according to their outlook.

Contrarian views exist, however. Bank of America's Michael Hartnett positions energy as the "ultimate contrarian trade" for 2026, predicting a 60% rally in oil prices to $96 per barrel according to their forecast. This optimism hinges on assumptions of supply constraints and policy shifts under a potential Trump administration. Yet, such a scenario remains speculative, given the current trajectory of OPEC+ production and global demand trends.

Contrarian Positioning: Metals and Gold as Strategic Bets

The case for contrarian positioning in base metals and gold rests on their alignment with structural shifts. Copper and aluminum are integral to the energy transition and AI infrastructure, sectors expected to drive long-term demand. Gold's role as a hedge against fiscal and geopolitical risks further strengthens its appeal.

Energy, by contrast, is caught in a cyclical downturn. While short-term volatility could create entry points, the broader trend of oversupply and weak demand suggests underperformance. Investors betting against energy must weigh the risks of policy surprises, such as U.S. sanctions on Russian oil or a sudden shift in OPEC+ strategy.

Conclusion

The 2026 commodities outlook underscores a clear divide between metals and energy. Base metals and gold are positioned to benefit from structural demand, policy-driven tailwinds, and macroeconomic uncertainty, while energy faces a bearish trajectory. For investors seeking contrarian opportunities, the case for metals and gold is compelling-but not without risks. As always, diversification and a close watch on policy shifts will be critical in navigating this fragmented landscape.