Commodities market outlook for 2026

Gold: can the rally continue after a record 2025?

Beyond supply and demand

Gold enters 2026 carrying the momentum of a historic multi-year rally—yet what's interesting is how uncrowded the market still feels. Even after breaking records through 2024 and 2025, gold is often described as 'overbought' but almost never 'over-owned.' And that difference matters. Institutional positioning still has room to expand, suggesting this rally isn't running on excessive speculation. It's running on structural demand that hasn't peaked yet.

A big part of the 2024-2025 rally was driven by policy—or more accurately, policy uncertainty. The US enters 2026 with elevated government spending, persistent inflation pockets, and real yields that have been drifting lower. Add a softer US dollar into the mix, and you get the same backbone that supported gold through the past two years still firmly intact.

The 2025 divergence is a clear reminder of gold's macro sensitivity. As real yields trended down from June to December, gold surged toward fresh highs. This inverse relationship remains one of the biggest drivers heading into 2026.

Figure 1: Gold vs. Real Yields - 2025 Divergence

The golden demand

Central banks remain one of the strongest forces behind gold's structural story. Several economies hold more than half their total reserves in gold, while others, including China and Japan, maintain single-digit exposure. That imbalance alone signals how much reallocation potential still exists across the system.

The chart below captures what most investors overlook: the long-term structural shift in how countries treat gold.

Figure 2: Gold as % of central bank reserves

The accumulation trend didn't slow in 2024-2025; it accelerated. China continues building strategic reserves. Turkey uses gold to stabilise currency volatility. Russia leans on gold as a sanction-resistant asset. And India along with several Middle Eastern economies see gold as long-term diversification rather than a short-term hedge. This isn't reactive buying—it's a redefinition of reserve strategy.

The sustained upward trend reinforces a key message: central bank demand is structural rather than cyclical. Even during price increases, purchases held firm.

Figure 3: Central bank gold purchase

The risks

If there's a key risk heading into 2026, it's an unexpectedly hawkish Federal Reserve. A sharp rise in real yields has historically cooled gold's momentum—even if temporarily. But right now, markets still expect more easing than tightening, especially with the US facing heavy refinancing needs, rising debt-servicing costs, and uneven pockets of growth.

This is also one of the rare cycles where gold and silver can trend higher together. Silver may deliver stronger percentage gains, but that doesn't weaken the gold outlook. If anything, it confirms that the entire metals complex is being driven by real macro demand—not hype, not retail spikes, and not one-off speculative flows.

2026 outlook

Across major banks, the average 2026 forecast clusters around $4,500-$4,700, while the upper band stretches toward $5,000 if macro conditions simply don't tighten. None of these projections assume crisis or geopolitical shock—just the continuation of a world that's still inflationary, noisy, and structurally fragmented. The more aggressive upside calls only come into play if tensions escalate or financial stress returns. And given recent years, that's not far-fetched.

We believe gold price actions sit somewhere between consolidation and continuation. A quieter start to the year wouldn't be surprising after two powerful years. But any new policy shift, geopolitical tension, or structural shock can reignite momentum quickly. With central banks still reshaping their reserves and long-term macro forces still aligned, gold enters 2026 with more strategic backing than any time in the past decade.

Gold doesn't need a crisis to rise in 2026. It simply needs the world to behave the way it has been: elevated debt, policy uncertainty, fragile alliances, and a dollar that no longer dominates as it once did. In that environment, gold doesn't chase fear—it absorbs it. And that alone makes 2026 one of the most interesting setups in years.

Figure 4: Spot gold daily chart

Silver: finally waking up

The breakout that changed everything

Silver is stepping into 2026 with a completely different energy. After breaking above $55 at the end of 2025 and holding the $50-$54 zone like a real base, the metal has shifted from 'the forgotten asset' to one of the most powerful stories in commodities. Year-to-date gains near 120% say it all. Silver hasn't just outperformed gold—it has rewritten the narrative after almost a decade of lagging.

And honestly, the shift didn't come out of nowhere. 2025 was the year the market changed character. If you look at the cumulative performance, silver suddenly stopped behaving like 2022-2024's choppy, frustrating range and started showing trend strength, higher lows, and a steady build in momentum.

The price action shown in the chart below usually means one thing: the market has finally accepted that the supply/demand imbalance is structural, and it's getting deeper.

Figure 5: Silver's cumulative performance

Supply constraints deepening

Supply constraints have been felt in China—the most important physical hub in the world. Its exchange-tracked inventories collapsed to decade lows after record exports.

Figure 6: Shanghai Gold Exchange silver inventories

When China stockpiles fall, the rest of the world feels it instantly. And this is happening during what is now the fifth year of consecutive structural deficit. Above-ground stocks are thinning out, and mine supply isn't responding fast enough for now. Most new production isn't expected before 2027-2028. So the tightness we're seeing today isn't a spike—it could be the new baseline.

Demand accelerating across industries

On the other side of the equation, demand isn't slowing down. It's accelerating. Solar alone is pulling more than 200 million ounces a year. Add EVs, high-efficiency semiconductors, 5G, and the massive electricity load of AI data centres, and silver becomes one of the few industrial metals whose demand curve steepens every year.

There isn't a real substitute. Every attempt to replace silver in these applications has failed or resulted in inferior performance. So we're entering 2026 with demand that keeps rising and supply that physically cannot keep up. That's the definition of structural support.

The technicals point to price discovery

The $50-$54 region was a ceiling for more than 13 years. Breaking above it, and more importantly, holding above it, signals that silver is entering price-discovery territory. A clear weekly close above $54 opens the door to the next technical extensions at $72 and $88.

These levels aren't fantasies; they come straight from measured moves of the multi-year consolidation. And we've seen what a real breakout can do—in 2011 silver almost doubled in a few months once price-discovery kicked in.

Figure 7: Silver price chart

The gold/silver ratio

The gold/silver ratio has dropped back to a major long-term support level trendline—a zone where silver historically begins to outperform gold aggressively.

Today's ratio is lower than recent standards, but elevated when compared to the long-term historical average, which typically sits closer to 40-60. An adjustment towards 60, or even 50 would imply a strong catch-up from silver, even if gold stays where it is. Put simply: silver is still cheap relative to gold.

Figure 8: Gold/silver ratio

2026 outlook

We're dealing with a market that finally has all three forces aligned: tightening supply, rising industrial demand, and a technical breakout setup that hasn't appeared in more than a decade. Silver is no longer the side story—it's one of the most asymmetric opportunities in commodities right now.

As for forecasts, the average of major banks places silver in the $56-$65 range for 2026. That's the conservative view. Technical models stretch further—towards $72 and $88, and potentially higher if the gold/silver ratio really compresses.

Energy: from balance narrative to supply-driven downtrend

Why sentiment has turned bearish

Oil is heading into 2026 under growing pressure. The tone across the market has flipped: what was supposed to be a tightening cycle has turned into a soft, supply-heavy environment. OPEC's latest outlook now expects global supply to meet demand next year, a sharp reversal from earlier assumptions of a deficit—and that shift alone is reshaping the entire narrative.

OPEC+ production is slowly climbing back, and the group's own numbers now show a well-supplied market into next year. That alone removes a lot of the bullish catalysts traders were leaning on. But the real pressure point comes from the US and other non-OPEC players, where supply growth is running three times faster than demand, according to JP Morgan.

With a Trump administration unlikely to support market-balancing policies, there's very little chance of coordinated intervention. Demand growth, while still positive, is no longer strong enough to absorb rising supply. China is stabilising rather than accelerating, and global manufacturing remains patchy.

Figure 9: OPEC+ crude oil production

Technical analysis

From a technical analysis perspective, both Brent crude oil and US crude oil have been locked in a consistent descending channel since early 2025, confirming a structurally bearish trend rather than a temporary pullback. Each rebound has failed at lower highs, while support levels continue to give way, reinforcing the idea that sellers remain in control.

Momentum indicators reflect this grind lower rather than capitulation: the relative strength index (RSI) has repeatedly struggled to sustain moves above neutral levels, signalling weak upside conviction rather than oversold exhaustion. As long as prices remain capped within these downward channels, rallies are likely to be corrective rather than trend-changing, keeping the broader bias tilted toward further downside into 2026 unless a clear break in structure emerges.

Figure 10: Brent crude price chart

Figure 11: US crude price chart

2026 outlook

2026 is shaping up to be a year where oil trades without a structural bullish anchor. Supply is winning, demand is slowing, and the market is already pricing a softer environment. However, geopolitical risks—from shipping lanes to election-year volatility—could still limit how far prices fall. In other words: downside pressure, yes... a straight collapse, less likely unless the surplus accelerates.

The view is also showing up in Wall Street projections:

• Brent is projected to average ~$62.23 in 2026, based on the latest Reuters poll of 35 analysts
• WTI is seen closer to $59

For context, Brent has averaged $68.80 so far in 2025, so these forecasts imply a meaningful step down in pricing power next year.

Figure 12: Analysts 2026 Brent and WTI price forecasts

The bearish tail-risk is aggressive: JP Morgan warns that Brent could fall by more than 50% into the low $30s if supply continues to surge ahead of demand through 2026. That scenario would require ongoing non-OPEC supply expansion, no significant response from OPEC+, weak or stagnant demand growth, and continued high inventories into mid-2026.

It's not the base case—but with the current surplus trajectory, it's not completely off the table either.

• _{Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation.}