As global markets usher in 2026, the commodity sector has demonstrated a strong footing, with asset manager Ninety One Plc (OTC:NINTF) bringing into focus gold and copper as particularly promising investment opportunities. In their recently released 2026 Natural Resources Outlook, the firm highlights a combination of structural demand drivers, supply limitations, and significantly improving mining margins that collectively underpin an optimistic forecast for the sector. Nonetheless, they caution that market volatility remains an intrinsic characteristic of commodity investments.
Supportive Macro Drivers Bolster Gold's Appeal
Gold retains a central role for Ninety One, buoyed by a set of favorable macroeconomic conditions. Factors such as a weakening U.S. dollar, elevated geopolitical tensions, expectations of lower real interest rates, and continued central bank acquisition support create a robust foundational outlook. Crucially, the firm observes that the upward price trajectory of gold is translating into tangible benefits for gold mining companies, with profits growing considerably faster than their costs.
Portfolio manager George Cheveley remarks, "The recent rally in gold prices is not merely a speculative surge but is grounded in persistent fundamentals. Given the likelihood of declining real interest rates and ongoing diversification efforts by central banks, the probability favors gold sustaining or slightly increasing its current levels rather than facing a sharp downturn." Consequently, Ninety One identifies a subset of gold miners as well-placed to capitalize on this environment, noting their expanded profit margins and solid cash flow generation capacity.
Reflecting on market performance, the VanEck Gold Miners ETF (NYSE:GDX) has witnessed a year-to-date rise of 13.43%, underscoring investor confidence in the sector.
Copper Dominates Base Metals Outlook Amid Supply Constraints
Copper emerges as the foremost base metal in Ninety One's forecast. Persistent supply interruptions, depleted inventories, and growing demand from sectors such as data center development and power grid expansion have propelled copper prices sharply upward throughout 2025, trends that continue into the new year.
Cheveley describes copper as the tightest major base metal market entering 2026, with supply and demand dynamics favoring producers. He also anticipates a positive influence on aluminum, driven by substitution effects as copper prices remain elevated. Nevertheless, he signals that anticipated capacity enhancements in the longer term could moderate price gains beyond the immediate horizon.
Energy Market Anticipated to Find a Bottom, with Select Opportunities Ahead
Ninety One approaches the near-term outlook for oil with caution, noting that the market is currently digesting incremental supply additions. However, the firm expects conditions to improve later in 2026 as spare capacity diminishes.
Portfolio manager Paul Gooden elaborates, "Our view is that oil prices will likely bottom out in the first half of 2026 and recover thereafter as it becomes apparent that both OPEC and U.S. shale producers are operating close to full capacity." He also points to geopolitical events, including developments in Venezuela, as sources of uncertainty. Despite these factors, the firm identifies select energy equities as potential beneficiaries as the sector cycles up.
Year-to-date performance for energy-focused investments is exemplified by the State Street Energy Select Sector ETF (NYSE:XLE), which is up 6.67%.
Optimism in Agriculture amid Shifting Supply-Demand Balances
In the agricultural sphere, Ninety One expresses a positive outlook for selected equities, anticipating tightening conditions in grain markets. Recent lower grain prices have discouraged planting in some areas, while sustained demand from biofuel production and livestock feed sectors supports demand resilience. These dynamics are expected to lead to improving supply-demand balances over time.
Need for Selective and Adaptive Investment Approach Amid Volatility
While the firm remains positive about the momentum in gold and copper and sees promise in energy and agriculture, it emphasizes the importance of selectivity and flexibility in portfolio management. Commodity markets are known for their volatility and the rapid unfolding of changing narratives.
The recent case of tin illustrates this complexity well. The London Metal Exchange (LME) tin price surged over 30% year-to-date, reaching a peak of $54,760 per ton on a recent Wednesday. This sharp rally occurred despite an improvement in tin supply and a significant increase in LME inventories from 11,000 tons in October to 19,000 tons, contrasting with the under 5,000 tons observed at the 2022 peak.
Gooden concludes, "An active, highly selective investment stance is crucial in the current environment. Although headline commodity trends may appear favorable, the range of outcomes at individual companies remains broad, necessitating detailed analysis and agility."
Overall, the insights from Ninety One Plc point towards a commodities landscape where gold and copper stand out as principal opportunities supported by strong fundamentals, but require investors to remain vigilant regarding volatility and company-specific developments across the sector.