Commodities: Sector-Wide Rise Driven by Specific Geopolitical and Political

The Bloomberg Commodity Total Return Index rose 5.5% in the first half of the year, with most of the gains concentrated in just four contracts: gold, silver, copper, and live cattle. Additionally, outside of this index, platinum soared nearly 50%. According to experts, persistent forces such as deglobalization, decarbonization, increased defense spending, dedollarization, demographic shifts, urbanization, and climate change continue to lay the groundwork for a potential commodities bull market.

Kerstin Hottner, head of commodities and portfolio manager at Vontobel, takes a cautious view and considers that we are seeing isolated sectoral movements driven by very specific factors. “We have seen cyclical and geopolitical impulses that have raised the prices of certain assets, but the current dynamics are much more determined by supply and demand, speculative flows, and technical factors. In a global context marked by geopolitical tensions, uncertain monetary policies, and a transitioning economic cycle, I see commodities regaining a central role in investment strategies,” says Hottner.

Precious metals

In this regard, each commodity rally has been explained by specific factors. For example, gold, which has been hitting highs for several weeks, has found an equilibrium point around $3,350/oz. “Although its role as a safe haven asset has slightly weakened due to a lower perception of risk, I still see several catalysts that could push it toward $3,500/oz by year-end. Among them are possible Fed rate cuts, likely starting in September; U.S. fiscal uncertainty tied to the ‘Big Beautiful Bill’ debate; continued central bank purchases (which I estimate at about 1,000 tons annually); and a greater tolerance for the opportunity cost of holding non-yielding gold in the face of rising sovereign risk,” explains Hottner.

From WisdomTree, they point to multiple macroeconomic risks supporting its valuation. Specifically, they cite trade uncertainty, debt trajectory, institutional quality, geopolitical risks, and ambiguous dollar policy.

“After its intraday high of $3,500/oz on April 22, 2025, gold has fluctuated between $3,180 and $3,400/oz. The lower end aligns with the 76.4% Fibonacci retracement level, and while our forecasts suggest a potential short-term break below this level, we anticipate strong support near the 61.8% level ($3,024/oz), paving the way for a rebound. For Q2 2026, we project that gold could reach $3,850/oz based on consensus macroeconomic data. We view the current period as a ‘loading spring’ phase, setting the stage for a strong upward move in gold prices,” says Nitesh Shah, head of commodities and macroeconomic research at WisdomTree.

The Vontobel expert also adds that, unlike gold, both silver and platinum have risen sharply, though more due to investment flows than strong fundamentals. “In the case of silver, the recent surge stems from growth in the solar sector, but there are regulations in China that could slow that…