Gold, oil, copper, lithium: How to play major commodities right now

With how easily equities markets have managed to shrug off the ongoing uncertainty from the conflict in the Middle East, it's fair to say it's actually commodities where the real stories have been.

After a strong showing for many major commodities in 2025, the sector has seen greater volatility in 2026, even as narratives around gold, silver and now oil have dominated market conversations.

So where do they find themselves now and how should you be looking to play them?

Here, Janus Henderson's Senior Portfolio Manager Darko Kuzmanovic offers the state of play on gold, oil, lithium and copper and where he's seeing the opportunities in each.

Gold

After what Kuzmanovic calls an "extended period of outperformance" that saw investors queueing up around the block at Martin Place, gold has settled back below US$5,000 after rallying back from March lows.

The queues are now gone, and broader macro events have taking the shine off gold's historic run, says Kuzmanovic. 

"One of the key factors driving gold is the geopolitical uncertainty of the US-Iran conflict, which has seen oil prices increase +80% YTD and European gas prices +60% YTD," he says. "This has supported the USD rally (a flight to safety perhaps) and increased concerns around global inflation, resulting in US 10-year and 30-year government yields peaking close to 4.5% and 5.0% respectively."

"With risks of potential inflation accelerating, the end to US interest rate cuts has impacted sentiment on gold. Not helping have been physical gold sales by certain central banks to support their currencies and improve liquidity."

While the geopolitical picture remains uncertain, he's looking to see renewed strength in the gold price until the dust settles.

"As is the case with these strong moves, gold needs to consolidate at support levels." 

On the stocks side of the equation, the outlook remains broadly positive given how gold producers have yet to price in elevated gold prices.

"Gold equities, as a result, have also been volatile but are still +15% YTD (GDX US), having been up +33% YTD before losing it all and then recovering recently," says Kuzmanovic. 

"The sector remains cheap on most multiples, continuing to generate strong cashflows allowing for buybacks and dividends. The sector is still not pricing in US$4,700/oz, but rather US$3,800–4,000/oz. However, with diesel prices increasing, cost pressures will rise for producers, especially open-pit operators.

Where he's looking now

"Our preference is for international producers due to the combination of value, costs, mine lives and growth options, such as AngloGold Ashanti, K92, IAMGOLD, Equinox and G Mining Ventures."

Oil

The driving story in markets in 2026 has undoubtedly been oil, notable not just for its impact on the global economy, but how the current supply shock has upset what had been a fairly stable market. 

"Prior to the US-Iran conflict, global oil prices traded in the range US$60-$70/lb as it was a very well supplied market that needed OPEC discipline to moderate and manage supply," said Kuzmanovic. 

Oil prices have become the bellwether for any perceived progress or regression in Middle East peace talks, but Kuzmanovic says regardless of whether the conflict resolves quickly, the longer-term outcomes remain known unknowns. 

"The longer supply is constrained, the longer it will take to recalibrate global oil supply chains with prices likely to stay stronger for longer," he says. "The damage to various Gulf State (and Iran) production and storage facilities is yet to fully appraised. It is estimated that approximately 25% of global hydrocarbons transit the Strait, so critical to commodity prices. 

It has been good news for Oil and Gas equities, he says, which have "performed +40% YTD as this has materially increased their cash-generating capacity supporting their buybacks and robust dividend yields (3-5%)," but continued performance remains contingent on higher oil prices. 

Where's he looking now

Producers have been rerated over the last few months and the ASX will like Santos due to its product mix and the impending inflexion in oil production from its Pikka project. 

We find better opportunities globally with names such as Equinor, EOG Resources, Diamondback and Whitecap. The key near term risk is the reversal in oil prices on any resolution in the Middle East.

Copper

While gold and oil have stolen the headlines, one unsung commodities outperformer has been copper, which has risen 30% in the last 12 months to new record highs above US$6.0/lb in early 2026.

There have been a few key catalysts for this surge, says Kuzmanovic. 

"These are record prices driven by geopolitical factors such as US tariffs, encouraging metal flows into the US (COMEX) and away from the LME, as well as near-term supply disruptions from major mines such as Grasberg (Freeport) and Kamoa-Kakula (Ivanhoe), keeping the market in modest deficit."

"Being the “electric metal”, copper continues to respond to highly favourable forecasts for future AI and data-centre construction growth, which should materially tighten the copper market over time."

But its impressive surge has also left it open to a corresponding selloff, given its sensitivity to macroeconomic factors. 

"At current spot prices, copper is significantly above the incentive price (estimated at ~US$4.50/lb) for new projects, leaving it at risk of reversal as global growth remains modest and at risk of further slowdown due to events in the Middle East that could weaken the global economy further."

There's been similar strength on the equities side, with copper stocks shrugging off sharp drops in the copper price in 2025. 

"Copper equities have generally performed extremely well, with many producers up 60–100% over the last 12 months," Kuzmanovic says. "Despite the recent pullback in March 2025, copper equities in many cases have recovered most of those losses."

Where he's looking now

"From an industry point of view, copper represents the growth option for many current producers and has stimulated a number of mergers and takeovers, including Anglo-Teck, Eldorado-Foran and Hudbay-Arizona Sonoran, as well as potential mergers that did not eventuate, such as BHP-Anglo and possibly Rio Tinto-Glencore. M&A is expected to continue in this sector."

"Given their performance over the last 12 months, copper equities are not particularly cheap as a group, but there remain attractive opportunities," says Kuzmanovic. 

"On the ASX following its recent pullback Sandfire Resources remains attractive from a valuation point of view. We find more interesting opportunities globally, due to their size, liquidity and growth potential such as ERO Copper, Antofagasta, Capstone Copper and Freeport."

Lithium

Another key performer has been the much-maligned lithium, which looks to be on a road to recovery after a years-long bear market. 

"Since July 2025, Lithium product prices have been some of the best performers, with many increasing +100% over that time," says Kuzmanovic. "After experiencing a nearly two-year, oversupply-induced bear market the outlook turned radically positive."

"Despite this bear market, lithium battery demand continued to grow at +15% CAGR, but the ramp up of new hard rock and brine developments and expansions resulted in supply chain inventory build collapsing sentiment."

Now, in 2026, demand is in the driver's seat as lithium emerges as another beneficiary of the substantial AI data centre buildout. 

"However in mid-25 this thematic had run its course, following industry production cuts and curtailment of new project developments, he says. 

"This was compounded by signs that inventories peaked, continued robust EV demand growth and the emergence of demand growth in ESS batteries (industrial scale energy storage)."

"This segment appears to be growing at +50% CAGR driven by the rapid growth in data centre construction. This was a big surprise to the market and seemingly out of nowhere it could represent +600kt LCE of demand by 2030 alone, compared to the EV market estimated at 1.6Mt LCE demand today."

Where he's looking now

Demand-side pressures will dictate where lithium stocks go next, says Kuzmanovic, after a strong showing so far in the cycle. 

"Most analysts are factoring market deficits in 2026 and beyond compared to surpluses in prior forecasts," he says.

"To date, existing lithium producers have experienced some of the biggest gains – with PLS (+291%), Ganfeng (+247%), ALB (+187%), SQM (+140%) and IGO (+100%) being notable performers in this early phase of the recovery. 

"Whilst they look a bit expensive on near-term earnings, they are in an earnings upgrade phase so valuations will be filled in."

But, like many other stocks and sectors, much depends on how the AI supercycle progresses from here. 

"It appears that the window for new development projects such as PMET or Wildcat is opening over the near term to be funded by the market. A key risk to the outlook is a slowdown in the data centre construction."

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