No Disruption to the Post-Covid Commodities Boom

Is it still the right time to invest in commodities? Where are we currently in the commodities cycle?

Alexandre Carrier (AC): We are currently in the middle of the commodities cycle. This cycle is primarily driven by capital investment. Between 2010 and 2020, low commodity prices led mining companies to scale back their investments.
The situation has changed since the pandemic: demand for metals, driven by electrification, renewable energy, electric vehicles and data centres, is strong.

These fast-growing sectors are highly capital-intensive and consume large quantities of strategic metals. For example, copper is essential to the electricity grid, data centres, defence, electric vehicles and robotics sectors. Whilst tin is essential for soldering semiconductors, but companies are investing only half of what is needed to meet future demand.

The rise in raw material prices is expected to stimulate investment. However, there is always a lag between the start of investment and the increase in production, and meaningful additional production is unlikely before 2030. The supply deficit remains.

Against this backdrop of supply shortages, are there any countries that are strategically important to the commodities market?

AC: If we attempt to categorise the key players, a first group of countries—such as Australia, Canada, Brazil and Chile—boast reliable production. Alongside this first group, there are countries whose production is less stable but of crucial importance, such as the Democratic Republic of the Congo, South Africa, Myanmar and Argentina. A disruption to supply in these countries could have significant repercussions on global commodities markets.

To what extent is the concentration of raw material production in a limited number of countries compatible with developed countries’ pursuit of sovereignty, particularly given the strategic importance of these metals in various digital, environmental and strategic transitions?

AC: The world is currently undergoing a phase of transition away from globalisation. The fragmentation of global trade is leading to a rise in protectionism, nationalism and a desire to secure supplies, particularly in strategic sectors.
Just as with the policies to build up oil reserves in the 1970s, countries are beginning to build up reserves of strategic materials.

The price of gold rose dramatically in 2025, driven in particular by central bank purchases. Do you think this trend will continue in 2026?

AC: The current trend among central banks to diversify away from the dollar is likely to continue in the coming years. Gold is a strategic diversification asset. Countries such as China, Kazakhstan and India have increased their exposure to gold. China still holds only around 10 percent of its foreign exchange reserves in gold. From a structural perspective, central banks are likely to remain net and regular buyers of gold in order to diversify their reserves away from the US dollar. In an uncertain geopolitical environment, gold has the advantage of being an asset that is immune to sanctions.

Gold is regarded, in the same way as the US dollar, US Treasury bonds or the Swiss franc, for example, as a safe-haven asset. Why is it such a reassuring asset for investors?

AC: Whilst gold is not a perfect hedging instrument, it remains an excellent tool for portfolio diversification. Firstly, it has a low correlation with equities and bonds. Furthermore, it carries no counterparty risk. Finally, in an uncertain geopolitical and macroeconomic climate, where levels of public spending and deficits, and the burden of debt servicing – driven by rising interest rates or budgetary rearmament efforts – are likely to continue to rise, gold appears to be a reassuring asset.

In your view, what underlying trend – one that is underestimated by the markets – could profoundly transform the commodities market?

AC: The current conflict between the United States, Israel and Iran highlights Europe and Asia’s energy dependence on fossil fuels from the Middle East.

This geopolitical wake-up call is likely to accelerate electrification and investment in renewable energy. Combustion-engine vehicles consume around 25 million barrels of oil per day. Rising oil prices are expected to boost demand for electric vehicles.

The drive to localise energy production, whether from wind, solar or nuclear sources, should be a priority for any country that imports fossil fuels. The quest for energy independence goes hand in hand with long-term support for demand for strategic metals such as copper, aluminium, tin and zinc.

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