UBS: Fundamentals Support Oil, Gold, Copper, and Aluminum — Remains Bullish on Commodities Into 2026
Alina Collins
UBS analyst Giovanni Staunovo says oil, gold, copper and aluminium fundamentals will anchor prices once the geopolitical risk premium fades — the bank stays bullish on commodities into 2026, and current volatility is a positioning window.
Why might oil prices climb further?
Petroleum inventories are falling across countries. Staunovo argues prices need to rise further to curb demand until stocks are replenished.
This means → the current price level is not a ceiling — the inventory gap is forcing prices upward.
Iran tensions and Strait of Hormuz risk keep adding upward pressure on oil, with near-term volatility staying elevated.
UBS cut its gold target — so why still bullish?
UBS last week lowered its year-end 2026 gold forecast from $5,900 to $5,500 per ounce, citing high US Treasury yields and a stronger dollar.
Yet analysts Schnider and Gordon still see gold rising roughly $1,000 by year-end. In plain terms = UBS trimmed the best-case scenario, not the direction.
The structural drivers are unchanged: rising global debt, persistent US fiscal deficits, central-bank reserve diversification.
What exactly is gold hedging against?
UBS is specific: gold hedges not the conflict itself but the second-order macro risks conflicts create — currency depreciation, ballooning deficits, slowing growth.
This means → even if geopolitical tensions ease, gold's allocation logic holds as long as those macro tail risks persist.
UBS recommends allocating up to about 5% of a diversified portfolio to gold.
Where is the opportunity in copper and aluminium?
Staunovo expects copper and aluminium supply to tighten further, supporting prices over the medium term.
Long-term demand has a structural anchor: electrification — the global shift to EVs and grid upgrades drives sustained copper and aluminium consumption.
UBS advises investors with heavy gold positions and large unrealised gains to broaden into copper, aluminium and agricultural commodities to diversify future return sources.
What role do commodities play in a portfolio?
UBS highlights that commodities have low historical correlation with equities and bonds — this reflects their ability to deliver returns from a different direction.
When supply-demand imbalances or macro risks intensify, commodity returns "can be very strong."
In plain terms = the core portfolio case for commodities rests on three things: inflation hedging, energy-shock resilience, and not betting everything on stocks and bonds.
Content is for reference only, not financial advice.