--- title: "UBS urges investors to position for a sustained commodity upcycle" publisher: "Stockmark.IT" author: "Stockmark.IT Website" published: "2026-08-31T05:36:37+00:00" modified: "2026-08-31T05:36:37+00:00" date: 2026-08-31 canonical: "https://stockmark.it/ubs-says-a-major-commodity-upcycle-is-taking-shape/" category: "Business" categories: ["Business", "Companies", "Energy", "Markets"] image: "https://i0.wp.com/stockmark.it/wp-content/uploads/2026/08/ubs-urges-investors-to-position-for-a-sustained-commodity.png?fit=1536%2C1024&quality=80&ssl=1" format: "news" language: "en-GB" --- # UBS urges investors to position for a sustained commodity upcycle **Published:** August 31, 2026 **Author:** Stockmark.IT Website **Categories:** Business, Companies, Energy, Markets **Featured image:** ![UBS urges investors to position for a sustained commodity upcycle](https://i0.wp.com/stockmark.it/wp-content/uploads/2026/08/ubs-urges-investors-to-position-for-a-sustained-commodity.png?fit=1536%2C1024&quality=80&ssl=1) --- UBS has advised clients to position their portfolios for a significant upcycle in commodity markets, citing a convergence of structural factors that are set to drive sustained demand for hard assets. The bank’s strategist, Sagar Khandelwal, issued the bullish call shortly after veteran commodities strategist Jeff Currie urged investors to prepare for the next leg of the rally. Khandelwal identified electrification, surging power demand, artificial intelligence infrastructure spending, persistent supply constraints, and years of underinvestment as the key drivers creating a favourable environment for commodity prices. He argued that commodities can generate returns while simultaneously protecting portfolios against energy disruptions and renewed inflationary pressures, a defensive role that becomes particularly valuable when such economic headwinds impact equities and bonds. The UBS strategist framed the investment case by suggesting that commodities offer both a structural source of return and portfolio protection in scenarios where higher inflation expectations challenge traditional asset classes. He noted that commodities have historically provided valuable diversification benefits due to their relatively low correlation with stocks and bonds. Khandelwal recommended that investors maintain diversified exposure across precious metals, energy, industrial metals, and agriculture to capture a broad range of opportunities. Given the fast-shifting leadership within commodity markets, he suggested that an actively managed approach would help investors navigate the evolving landscape effectively. Regarding precious metals, Khandelwal observed that gold has resumed its upward trend as US inflation concerns have eased and markets have reined in expectations for near-term Federal Reserve rate hikes. He believes that central bank demand, continued diversification away from the US dollar, and global debt concerns will remain important structural supports for the metal. For investors who have realised substantial gains following the strong rally over the past year, he suggested that higher prices may provide an opportunity to rebalance some exposure into other commodity sectors. The bank continues to view gold as a useful strategic diversifier and remains constructive on gold prices over the next 12 months. In the energy sector, the ongoing conflict between the US and Iran highlights the fluid nature of geopolitical events and their potential to impact energy markets. With crude supply remaining restricted and both sides facing constraints in reaching a compromise, uncertainty over how quickly shipping conditions and production will normalise is likely to keep energy markets sensitive. Khandelwal stated that energy exposure can help protect against lingering supply uncertainty and inflation spillovers, while robust demand supports a constructive medium-term outlook for the asset class. Industrial metals, such as copper, have benefited from secular demand drivers including electrification, the energy transition, and the ongoing global buildout of AI infrastructure. Prices have remained resilient despite periodic global economic growth worries. While factors like tariffs and trade policy risks may keep prices volatile in the near term, demand trends remain constructive for the asset class over the longer term. Specifically regarding copper, supply constraints and projected market deficits reinforce the bank’s positive longer-term outlook. Market data supports this bullish view, with the Quantix Commodity Index Total Return showing that the broad commodity complex has surged to a record high, gaining more than 22.5% since late June. The index tracks 24 US-dollar-denominated futures across energy, agriculture, livestock, industrial metals, and precious metals, indicating that the rally is no longer confined to a single sector. This momentum reinforces Currie’s recent warning that scarcity in the physical world is reemerging. Recent price movements include London copper trading above 14,000 dollars a ton, the Bloomberg Agriculture Spot Index breaking out to a three-year high, and European tungsten prices exceeding 3,000 dollars a ton. Currie concluded that the illusion of abundance is likely behind us. --- **Original URL:** https://stockmark.it/ubs-says-a-major-commodity-upcycle-is-taking-shape/ *Created by [WP Markdown Endpoint](https://wpmarkdownendpoint.com/)*