Best commodities to invest and trade in for 2026

Commodities in brief

While stocks and forex always seem to get the lion's share of investor attention, commodities are perhaps the most important assets worldwide. This is because commodities underpin the economic system in a fundamental way; every company in the world ultimately generates profit through the commodity chain.

Commodities are split into two segments: hard commodities are defined as natural resources which are usually mined or extracted from the ground, such as oil, gold, or copper. Soft commodities are grown and usually require maintenance during production, such as livestock, wheat, or sugar.

Investing in commodities arguably gives investors an excellent advantage in that they provide significant diversification in a portfolio. This is because commodities' performance historically demonstrates a low correlation with other major asset classes, such as cash, fixed income, or stocks.

2025 proved this point emphatically. While equities experienced volatility driven by trade war fears and geopolitical tensions, the commodities sector, and in particular precious metals, delivered some of the strongest returns seen in decades. Investors who had diversified into gold, silver and copper were well rewarded.

How to invest and trade in commodities with us

1. Learn more about commodities
2. Open an account with us or practise on a demo
3. Select your opportunity
4. Choose your position size and manage your risk
5. Place your deal and monitor your trade

You can either trade in commodities directly, or trade using spread betting or CFDs to benefit from leverage. We also offer many ETFs and ETCs that are based on commodities, and there are thousands of commodity-focused resource stocks on offer, such as Rio Tinto, Glencore and Anglo American.

Keep in mind, leverage means you can gain or lose money faster than expected. Because your position size is far greater than your deposit, you could lose more money than you put in. Be aware also that past performance is not an indicator of future returns.

Exchange Traded Commodities

Exchange Traded Commodities (ETCs) are financial instruments designed to enable indirect investing and trading on commodities, but without you having to take direct ownership.

They act as debt instruments designed to track the performance of a single commodity or a basket of commodities, making them a popular choice for investors seeking precise exposure to specific commodities. They offer a wide variety of options, ranging from hard commodities like metals and oil to soft commodities like grains and coffee.

ETCs are designed to track the price of the underlying material asset, meaning their value will be influenced by factors that affect the price of the commodity itself. For instance, when trading wheat, elements like weather patterns and crop yields can impact its price.

Some ETCs also provide leveraged or inverse exposure, catering to sophisticated trading strategies, and many come with currency-hedged options to account for foreign exchange risks.

However, ETCs do also carry counterparty risk as they are structured as debt instruments, and their returns can be eroded by costs associated with storage or rolling futures contracts, particularly for physically backed ETCs or those tracking futures. Additionally, ETCs often focus on individual commodities, which can make them unattractive to investors seeking diversification.

Commodity Exchange Traded Funds

Exchange Traded Funds (ETFs) are far better known than ETCs. While ETCs give you exposure to commodities, ETFs do the same thing but with securities instead. Like an ETC, you're investing in or trading on a financial product that tracks the performance of underlying assets without you having to take ownership of any of them.

However, a commodity ETF will take their price from futures contracts of that commodity, rather than containing the physical asset.

Investing directly in commodities futures can be both impractical and expensive. There's even the occasional report of a trader who has forgotten to close a futures position who is forced to take physical delivery of a commodity.

Further, futures themselves are relatively complex, typically have large contract sizes, come with margin demands, and include a component of open-ended risk that needs to be covered by the trader. This can make them unattractive to some retail investors, especially those without starting their investing journey.

Most commonly, commodity ETFs track a benchmark index which either measures the price of a single commodity or a basket of multiple commodities. Most are synthetic ETFs which track commodity futures, and therefore may perform better or worse than the spot price of the commodity itself. Of course, some commodity ETFs will directly invest. However, this is the exception, rather than the rule.

One of their key advantages is diversification, as many commodity ETFs invest in a basket of commodities or commodity-producing companies, spreading risk across multiple assets.

They are also highly liquid, trading like stocks on major exchanges, and physically-backed ETFs eliminate counterparty risk by holding the underlying commodity directly. Additionally, ETFs can offer tax benefits depending on their structure and jurisdiction. However, commodity ETFs may face tracking errors, particularly when investing in futures or related equities, as these assets don't always perfectly mimic commodity price movements.

Furthermore, expense ratios for ETFs can be higher compared to ETCs, and their indirect exposure may dilute the pure impact of commodity price changes due to broader market trends.

When trading, it's important to note that the relationship between commodities and stocks is not linear. Some commodity prices have an inverse reaction to stocks, while others move in a parallel direction. There are several factors that impact the price of the underlying commodities and stocks, such as market forces, weather patterns, and economic and political stability.

Top commodities to watch

Some of the best performing commodities over the past year include:

• Silver — The standout story, silver surged to all-time highs above $120 per ounce, driven by a rare convergence of safe-haven demand, central bank buying and surging industrial appetite. Its role in solar panels, AI hardware, and electrification infrastructure created a structural supply deficit, sending prices to levels not seen since the metal's brief 1980 spike
• Gold — Gold has smashed through the $5,000 per ounce barrier, posting one of its strongest annual gains on record. Elevated geopolitical tensions, including the escalating Israel–Iran conflict, combined with sustained central bank purchases from emerging market nations and a broadly weakening US dollar drove demand throughout the year.
• Copper — Copper delivered its strongest annual performance since 2009, driven by a perfect storm of supply disruptions, including a mudflow shutting down the Grasberg mine which accounts for roughly 5% of global output, and extraordinary demand from AI data centres, EV manufacturing and renewable energy infrastructure. US tariff-driven stockpiling by American buyers also worsened regional shortages.
• Lithium Carbonate — After years of price collapses following the 2022 peak, lithium staged a significant recovery in 2025. The catalyst was a major supply disruption when CATL halted operations at one of the world's largest lithium mines in Jiangxi in China, tightening supply precisely as demand from EV and battery-storage manufacturers rebounded strongly
• Platinum — Platinum broke out spectacularly in 2025 after years of range-bound trading. Supply concentration risks, combined with the ongoing substitution of palladium with platinum in automotive catalysts, drove the metal sharply higher. The fact that the US added platinum group metals to its critical minerals list added a further geopolitical premium

Worst performing commodities of 2025

Some of the worst performing commodities were:

• Natural Gas — US natural gas had a volatile year, experiencing sharp mid-year losses before recovering into the winter months. Steady domestic production growth kept prices suppressed through summer, but a cold winter, strong European LNG demand and large inventory withdrawals caused a dramatic reversal.
• Crude Oil — Oil was among 2025's major disappointments. An oversupplied global market, driven by long-cycle projects coming online and OPEC+ strategic decisions, weighed heavily on prices throughout the year. Weak Chinese industrial and construction demand compounded the oversupply problem
• Iron Ore — Continued weakness in China's property and construction sectors sustained the downward pressure on iron ore that began in 2024. While some base metals recovered on green energy and AI-driven demand, iron ore remained exposed to the construction cycle, where activity stayed subdued
• Wheat — Ample global wheat stocks kept prices depressed throughout 2025, with no significant supply shocks to offset the surplus. Global grain markets were well supplied, and a normalisation of weather patterns in major growing regions prevented any meaningful price recovery

Best commodity ETFs and ETCs to watch

Below is a selection of several popular ETFs and ETCs:

1. Invesco Physical Gold GBP Hedged ETC — provides investors with exposure to the price of gold by holding allocated gold bullion held in JP Morgan vaults in London. This ETC closely tracks the spot price of gold and is backed by physical gold bars, making it a cost-effective way to invest in the metal while avoiding the complexities of futures contracts. With gold entering 2026 with strong structural tailwinds, this remains a core holding for many commodity investors.
2. WisdomTree Physical Silver — provides direct exposure to silver by holding physical silver bullion stored in HSBC Bank vaults. After silver's historic 2025 performance, the structural supply deficit and rising industrial demand from the solar and electronics sectors mean that exposure to silver remains compelling for 2026. This ETC tracks the spot price of silver and is fully backed by allocated silver, removing the need to physically handle or store the metal.
3. WisdomTree Copper ETC — offers targeted exposure to copper price movements, tracking front-month copper futures. With copper widely cited as the analyst pick for best-performing base metal in 2026, driven by AI, electrification, and ongoing supply constraints, this ETC offers a straightforward route to that theme.
4. Invesco DB Agriculture — offers exposure to a diversified portfolio of agricultural commodities, including cocoa, corn, soybeans and wheat, by tracking the DBIQ Diversified Agriculture Index. It provides investors with a way to hedge against inflation or gain exposure to the agricultural sector without having to select individual soft commodity positions.
5. WisdomTree WTI Crude Oil Pre-roll - gbp — offers exposure to the performance of West Texas Intermediate crude oil prices by tracking front-month crude oil futures. While the broad outlook for oil in 2026 is bearish given oversupply dynamics, some traders may see oil's depressed valuations as a contrarian opportunity, or may use crude ETCs as part of a hedging strategy within a broader commodity

What to watch in 2026

Looking into 2026, the commodity complex faces a mixed but nuanced outlook. The World Bank forecasts global commodity prices will decline modestly for a fourth consecutive year overall, but this aggregate figure masks significant divergences between sectors.

Precious metals are widely expected to remain among the leading performers. Gold enters 2026 with several major banks forecasting even higher prices, with some technical models pointing toward $6,000 or more if the current macro environment of elevated debt, geopolitical uncertainty and continued central bank accumulation persists. Silver remains highly volatile in its price discovery with some analysts pointing to a divergence between western and eastern market pricing.

For copper, while near-term volatility remains high given tariff uncertainty and trade policy noise, the long-term structural case may appear compelling: copper consumption is projected to rise by around 50% by 2040, driven by AI infrastructure, EV production, grid modernisation and renewable energy. Supply, however, is structurally slow to respond, with major greenfield mines requiring at least 10 to 15 years to come online, and existing operations face declining ore grades.

Agricultural commodities are expected to ease gently, with stable growing conditions in most regions keeping grain, soybean, and corn markets well supplied. Coffee and cattle remain potential exceptions, where supply tightness could create opportunities.

Best commodities summed up

• Commodities underpin the economic system in a fundamental way; every company in the world ultimately generates profit through the commodity chain
• Hard commodities are defined as natural resources which are usually mined or extracted from the ground, such as oil, gold, or copper.
• Soft commodities are grown and usually require maintenance during production, such as livestock, wheat, or sugar
• 2025 was a landmark year for precious metals, with silver and gold bother surging to all-time highs