From the studio

Video: Data with Donovan: Jobs data and the Fed's next move (8 mins)
Video:CIO’s Min Lan Tan with surprising Asia ideas for 2026 (6 mins)
Video: Fine tune your alternatives mix for 2026, with CIO's Karim Cherif (6 mins)
Video: CIO's Leslie Falconio: What to buy (and sell) in credit for 2026 (6 mins)

Thought of the day

Oil prices this week fell to their lowest level in a month amid signs of progress toward a peace deal between Ukraine and Russia. Ukrainian President Volodymyr Zelenskyy said he was ready to advance an US-backed framework for ending the war, while US President Donald Trump said Moscow had agreed to some concessions.

How the peace plan will develop remains to be seen, with Trump sending special envoy Steve Witkoff to Moscow next week for further talks with Russian President Vladimir Putin. Kyiv has tentatively agreed to an updated version of the peace plan, addressing concerns about Trump’s original draft, while Kremlin spokesperson Dmitry Peskov on Wednesday cautioned against premature conclusions, stating that claims of an imminent agreement are speculative. Putin himself acknowledged the complexity of the conflict, emphasizing the need for “appropriate solutions” during a meeting with Belarusian President Alexander Lukashenko.

We maintain the view that oil prices will stay supported in the coming months. In fact, we have a more positive price outlook for next year, partly underpinning our Attractive view on commodities into 2026.

Oil prices should rise on improving demand and stalling supply growth. Oil prices have lagged other commodities this year amid slower-than-expected demand growth and ample supply from the Americas and OPEC+. But while demand has fallen short, we do not see a supply glut. The recent increase in oil-on-water levels—the amount of crude that is currently being transported on ships at sea—has not translated into a build-up in on-land inventories. In fact, data from the International Energy Agency (IEA) indicate a decline in crude stored in tanks on land. With market focus gradually shifting to stalling supply growth in non-OPEC+ producers and limited spare capacity, and as oil demand is continuing to grow, we expect oil prices to move higher from mid-2026. We expect Brent crude oil to trade at USD 67/bbl at the end of 2026, compared to close to USD 63/bbl at the time of writing.

Market deficits in both copper and aluminum should support prices. Copper prices have been supported by supply disruptions this year, and we think supply-side risks will likely persist into 2026. We now see just 2.2% production growth for refined copper next year, down from our previous forecast of a 2.8% rise. Meanwhile, we expect demand to grow 2.8% in 2026, supported by a modest expansion in global manufacturing and robust Chinese consumption of electric vehicles, renewables, and appliances. Over the longer term, major economies’ shift toward renewable energy and rising consumption from data centers should drive strong copper demand. Similarly, we now see a larger deficit in aluminum next year, with demand supported by continued strength in energy transition sectors.

Gold demand should rise further, while agriculture offers an attractive entry point. Gold has recently recouped part of the decline from late October, and we expect rising demand for the precious metal to support higher prices ahead. Further interest rate cuts by the Federal Reserve, lower real yields, increasing fiscal risks, and changes in the domestic US political environment should extend the current strong buying trends of central banks and investors, in our view. We see gold at USD 4,500/oz by June 2026. In agriculture, we see a compelling entry point after a year or so of poor performance, especially amid emerging weather-related risks in grains and persistently low global inventories in key soft commodities and livestock. Exposure to agriculture also offers benefits of diversification given its low correlation to economic cycles.

So, while commodities face periodic volatility, we think they can play a valuable role in portfolios. Returns are strongest when supply-demand imbalances or macroeconomic risks are elevated. Investors can access commodities through diversified indices, exchange traded funds (ETFs), or structured investments, provided they are aware of unique risks such as price swings and costs associated with futures or physical holdings.