After a turbulent start to the year, commodity markets appear to be stabilizing from UBS’s perspective – without the underlying price drivers having disappeared. In a recent commodity update, analysts point out that precious metals, oil, and industrial metals collectively gained in January despite high fluctuations. With declining volatility, the argument goes, fundamental data would then come to the fore more strongly – especially for gold, but also for copper and aluminum. UBS thus holds a fundamentally different opinion than HSBC analysts, who anticipate persistently high volatility, at least for gold.
The experts describe the development as follows: Political, geopolitical, and economic uncertainties boosted demand for “safe havens,” thereby supporting precious metal prices in January. At the same time, copper reached a record level at the end of January and subsequently consolidated. For oil, short-term supply disruptions – including in the USA and Kazakhstan – combined with a weaker US dollar and tensions in the Middle East provided tailwinds. All in all, UBS sees a picture where short-term nervousness is decreasing, but medium-term drivers remain intact.
UBS: Declining Volatility Brings Fundamentals Back into Focus
The tone of the update is clear: UBS expects commodities to play a larger role in portfolios by 2026 – driven by classic factors such as supply and demand, but also by longer-term structural trends. Explicitly mentioned are imbalances between production and demand, geopolitical risks, and the global energy transition as themes that could repeatedly impact prices in the coming months.
It is noteworthy that UBS does not view the January movements as an isolated event. Instead, the month is used as an example of how quickly sentiment and news can translate into strong fluctuations in commodities – and how rapidly these fluctuations normalize once acute triggers lose significance. It is precisely in this transitional phase, where markets appear “calmer,” that the bank sees the point where the actual fundamentals dictate the pace.
In this context, price movements across the commodity spectrum are categorized: precious metals benefited from safety needs, copper from a tight market environment, and oil from temporary supply interruptions. UBS therefore views recent developments not as a mere coincidence of a volatile month, but as a movement based on several, partly structural, pillars.
Gold Forecast Significantly Raised: UBS Names $6,200 by Mid-Year
UBS places a clear emphasis on gold. Experts expect gold to resume its upward trend and rise towards $6,200 per ounce by mid-year. Drivers cited include a combination of demand from central banks and investors, high fiscal deficits, lower inflation-adjusted US interest rates (real interest rates), and ongoing geopolitical risks. In this argumentation, gold appears less as a short-term momentum topic and more as a “portfolio building block” that is particularly in demand during phases of increased uncertainty.
Also striking is the comparison to the forecast from the beginning of the month: On January 5, UBS had still stated that central bank purchases, rising deficits, lower US interest rates, and geopolitical risks could carry gold to $5,000 by the end of the first quarter. The new target of $6,200 by mid-year is thus a clear upward adjustment within a short period. This signals how strongly UBS now weighs the current framework conditions – and that the bank assesses the factors behind the gold market as robust.
Copper, Aluminum, and Oil: Bottlenecks and Structural Trends as a Common Thread
In addition to gold, UBS also highlights industrial metals. Analysts state that further supply bottlenecks are expected for copper and aluminum, which could support prices in the medium term. In the long term, demand is also driven by structural developments such as electrification. In this logic, copper and aluminum fit into a picture where demand from industry, infrastructure, and the energy transition meets markets that cannot provide additional quantities arbitrarily quickly.
Regarding oil, the major bank refers to the events in January: short-term supply disruptions in the USA and Kazakhstan, as well as a weaker dollar, supported prices; geopolitical tensions in the Middle East are also mentioned as an accompanying factor. The message is less about a single price point and more about the indication that commodities – whether precious metals, industrial metals, or energy – will remain susceptible to news and supply impulses in 2026.
In summary, UBS thus paints a commodity picture that functions on two levels: in the short term, political events and supply disruptions can trigger strong movements; in the medium term, structural factors such as deficits, investment cycles, and electrification are at play. For gold, this translates into a significantly raised target, and for copper and aluminum, into the expectation that a tight market will support price levels. The core message of the update is: If current volatility continues to subside, precisely these fundamental factors could increasingly set the tone – with UBS clearly on the side of a fundamentally supportive environment for gold and selected key commodities.
