2025 was the year to own commodities. 2026 is the year to pick them

Commodities investors have had a wild ride in 2026, following a stunning 2025 which saw miners across gold, copper, lithium, and other commodities produce strong double-digit or, in some cases, even triple-digit returns.

Since March however, the story has been markedly different. Gold has lost its lustre, copper has stopped conducting, and lithium is no longer charging.

But zoom out a bit, and even for these formerly hot commodities, things don’t look too bad. The S&P/ASX All Ordinaries Gold index, while down from its March highs, is still up over 42% in 12 months, the Global X Copper Miners ETF (ASX: WIRE), which tracks global copper miners, is up over 64%, and the Global X Battery Tech & Lithium ETF (ASX: ACDC), which invests in lithium mining, refining, and battery production, is up over 19%.

The issue with talking about ‘commodities’ though, is that it’s not a homogeneous asset class. Since March, precious metals, industrial metals, and battery minerals have all been responding to different forces. Some are directly affected by the closure of the Strait of Hormuz, some have been impacted by rising government bond yields, others are being impacted by export bans and tariffs.

And of course, there’s oil. Not only is the situation for oil and gas almost a polar opposite to hard commodities, but it’s also one of the key drivers for the correction in hard commodities producers. Gold miners often have around 10-15% of their cost base directly exposed to oil prices, while copper producers may face the same pressure through diesel, electricity and freight.

But for those with exposure to oil and gas, 2026 has been an outstanding year. Betashares Global Energy Companies ETF (ASX: FUEL) is up over 34% YTD, while Betashares Crude Oil Index ETF (ASX: OOO) has rallied a stunning 84%.

‘The commodities cycle’ doesn’t exist

Forgive the hyperbolic subheader above, but there is some truth to it. Commodities cycles do exist, but it’s not a single cycle that affects all commodities equally and simultaneously.

For those of us who earned our investing stripes during the commodities supercycle of the 2000s and 2010s, like myself, assuming that all commodities will be affected similarly is an easy mistake to make – and even that was not as perfectly synchronised as some may remember. But that supercycle was the exception, not the rule.

From January 2002 to their respective peaks, the RBA calculated gains of roughly 667% for iron ore, 469% for coking coal, 427% for copper, 406% for gold and 444% for oil. They didn’t peak simultaneously, but broadly speaking, investors were getting a powerful tailwind across much of the complex.

1950-1951 – The Korean War

The 1950-51 commodity boom, however, was primarily triggered by the Korean War. This produced a dramatic commodity spike, but it was largely an inventory and supply-security shock rather than a decade-long structural increase in consumption. Copper, rubber, tin and other strategic raw materials surged as stockpiles suddenly grew. Australian wool prices jumped ~250%, while tin and natural rubber doubled, according to the IMF.

Oil completely sat out the boom though, with West Texas crude effectively unchanged between 1948 and 1953. There were other factors at play in crude, such as the Texas Railroad Commission effectively acting as a US oil regulator, and price controls from the Truman administration, but importantly, there also wasn’t the same physical scarcity.

The boom didn’t last either. But late 1951/early 1952, prices had retreated significantly. Not entirely back to their pre-boom levels, but well below their peaks.

Source: The World Economic Situation, IMF, 1952. 

The 1970s – the ‘inflation boom’

This is the boom that the older investors likely remember best, and younger investors have heard stories about. I fall into the latter category, having heard stories of the Poseidon Bubble from my mum, who worked for an options trader in Sydney at the time.

But the 1970s commodities boom wasn’t as neat as the 2000s and 2010s supercycle. I think it’s best described as several overlapping commodities cycles, rather than a single cycle. And I suspect it might be the best analogy to what we’re seeing today.

Non-oil commodities already surged in 1972–73, helped by exceptionally strong industrial demand. Agricultural prices were additionally hit by poor harvests, while the Soviet Union became a major grain importer. Then the Arab oil embargo and OPEC price increases arrived later in 1973, producing the famous oil shock.

But those cycles quickly diverged. World Bank historical work notes that agricultural raw materials and metals peaked around 1974 and then fell sharply as recession hit, while oil remained structurally much more expensive. By June 1975, most non-oil commodity prices were only around 10% above their 1973 levels, despite petroleum prices having roughly quadrupled between 1973 and 1974.

Coffee and cocoa even had another large rally in 1975–77, partly because of weather disruption, just as much of the industrial commodity complex was cooling.

What it means for investors

With the unusually broad rally of 2025 now giving way to a much more divergent market, investors need to think carefully about where subsequent opportunities might emerge. Some previously hot commodities may fall out of favour, others might have another big rally, and some which have yet to experience an uplift will probably join in.

Livewire’s 2026 Commodities in Focus series hopes to shed light on these issues, but more importantly, provide a longer-term view on the commodities complex. Articles from Kerry Sun, Carl Capolingua, and me, will look at the commodity price cycle, gold, copper, uranium, and interesting drill results from a variety of explorers. Meanwhile, Tom Stelzer and Anna Dadic will share interviews with commodities investing experts from Janus Henderson Investors, Argonaut Funds Management, and Global X ETFs.

And don’t miss our special Buy Hold Sell episode this Friday, covering ASX-listed commodities producers.