MW Stocks are signaling that another commodities 'supercycle' is afoot in 2026
By Vivien Lou Chen and Joy Wiltermuth
'We are seeing oil, gold and silver rally as geopolitical tensions are rising, especially after the military operation in Venezuela,' says one CIO
President Donald Trump's military action in Venezuela has helped give oil stocks and precious metals a lift.
Parts of the financial market linked to hard assets and tangible items appear to be settling into what could become a prolonged boom - bolstered by their ability to hold their value over time, resist trading fluctuations and act as a hedge against future inflation.
Commodity markets are at the center of much of this action, with shares of materials XX:SP500.15 and energy XX:SP500.10 stocks within the S&P 500 index SPX up by 6.8% and 4.1%, respectively, since the start of the year and as of Monday morning trading. Also doing well so far in 2026 are precious metals such as gold (GC00) and silver (SI00), which have respectively climbed almost 6.2% and 19.6%, based on preliminary data, following torrid run-ups of 64% and 141% in 2025.
Even Brent crude (BRN00), the international benchmark for oil, was up 3.9% this month as uncertainty related to the recent U.S. intervention in Venezuela overshadowed worries about a global oil supply glut.
"We are possibly living through an inflection point now - with equities and hard assets, including commodities, changing in terms of relative strength," said Jordan Rizzuto, chief investment officer at GammaRoad Capital Partners in New York. Already, he said, "we've lived through one of the greatest increases in financial assets relative to hard assets." But precious metals are in the headlines now, he added, and there are possible "tectonic" shifts afoot.
One of those shifts relates to the enormous capital expenditures behind the aggressive buildout of data centers and artificial-intelligence infrastructure in the U.S. and around the world.
Warren Pies, co-founder and strategist at 3Fourteen Research in Sarasota, Fla., links the current demand for industrial metals and natural gas (NG00) to this AI and data-center buildout. Gold and other precious metals are getting a lift from the so-called dollar debasement trade, he said, which is based on the view that excessive government debt and fiscal deficits are eroding the U.S. currency's DXY value and purchasing power. "These dynamics make commodities a strong diversifier in portfolios alongside equities," Pies said.
Historically speaking, hard assets tend to perform meaningfully better relative to equities when accompanied by accelerated inflation. Economic releases for the coming week will offer fresh looks at inflation and how strong the U.S. economy appears to be.
Tuesday brings the consumer-price index for December, which some Wall Street firms expect to be skewed upward due to distortions in October and November data created by the U.S. government shutdown late last year. On Wednesday, November data on retail sales and the producer-price index will be released.
On Monday, stocks DJIA SPX COMP opened lower following the weekend revelation that the Department of Justice has opened an investigation into Federal Reserve Chair Jerome Powell. All three major U.S. indexes had finished 2026's first full week of trading on a positive note last Friday, after the Supreme Court did not issue an anticipated opinion on President Donald Trump's widespread tariffs against other countries. On Sunday, Trump said he was "inclined" to keep ExxonMobil $(XOM)$ out of Venezuela after its top executive expressed skepticism about oil investment efforts there after U.S. military forces toppled former President Nicolás Maduro.
"We are seeing oil, gold and silver rally as geopolitical tensions are rising, especially after the military operation in Venezuela," said Eric Sterner, chief investment officer of Apollon Wealth Management in Mount Pleasant, S.C. "Venezuela was once a major oil producer and claims to have the largest oil reserves in the world, though production has dwindled to less than 1 million barrels per day. The country's production could be reduced in the near term due to more potential political instability - though with global oil markets already in surplus, the impact on global oil prices will most likely be limited."
Gary Schlossberg, a global strategist at Wells Fargo Investment Institute in San Francisco, said that at least some of the current support for hard assets is coming from "fresh geopolitical uncertainties, specifically Venezuela in the case of oil."
See also: Trump sees 'massive wealth' from Venezuela's oil as companies meet at White House. Experts doubt how soon it could flow.
Precious metals are also benefiting from these uncertainties, along with lingering inflation concerns against a backdrop of strong economic growth and prospects for more interest-rate cuts by the Federal Reserve, Schlossberg told MarketWatch in an email. Separately, "materials are being supported by supply disruptions in copper and strong data-center-related demand," he noted.
Copper (HG00), a nonprecious metal used in construction and many other applications, is trading near a record high after having eclipsed $6 per pound again on Monday - and many market observers believe its rally is likely to continue.
Read: Copper looks better than aluminum medium-term, says JPMorgan
'On a tear'
The current environment is reminiscent of the commodities "supercycle" that took place in the early 2000s and reflects the accelerating AI- and tech-related capex boom, according to John Velis, macroeconomic strategist for the Americas at BNY in New York.
Other factors contributing to the acceleration of hard-asset prices right now include geopolitical risks, the strong growth of money supply around the world and the outlook for "marginally more dovish central-bank policy expectations globally," he said.
"Hard assets have been on a tear to start the year, with the precious-metals rally of last year now spilling over into industrial metals," Velis said. "This could eventually move into energy also, as global growth sentiment for 2026 improves."
For now, he added, "relative valuations of financial assets - particularly equities - versus hard assets [not including precious metals] point to attractive price levels to enter into this investment theme, with demand expected to increase for industrial applications."
-Vivien Lou Chen -Joy Wiltermuth
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(END) Dow Jones Newswires
January 12, 2026 09:43 ET (14:43 GMT)
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