UBS Warns of Geopolitical Risks, Sees Gold, Oil Rebound in 2026 - Commodity Market Outlook

💡 UBS expects gold, oil prices to rebound in 2026 on geopolitical risks, but base metals face headwinds

The Federal Reserve's decision to hike interest rates has sent shockwaves through the commodity markets. The dollar's strength has weighed heavily on gold and oil prices, which have fallen sharply in recent months. However, UBS predicts that geopolitical tensions will drive a rebound in gold and oil prices in 2026.

Geopolitical Risks to Drive Gold and Oil Prices

UBS expects gold prices to rise to $1,900 per ounce in 2026 on growing concerns over global instability. The Swiss bank believes that the ongoing conflict in Ukraine and rising tensions between the US and China will drive investors to seek safe-haven assets. $GLD, which tracks the price of gold, is expected to outperform other precious metals in 2026.

Base Metals Face Headwinds

On the other hand, UBS forecasts that base metals such as copper, zinc, and nickel will face significant headwinds in 2026. The bank expects a decline in demand from major consumers such as China and the US, which will lead to a surplus in supply. $COPPER, which tracks the price of copper, is expected to fall to $7,000 per ton in 2026.

Oil Prices to Rebound

UBS predicts that oil prices will rise to $70 per barrel in 2026 on growing concerns over global supply disruptions. The bank believes that the ongoing conflict in the Middle East and rising tensions between the US and Iran will drive up prices. $USO, which tracks the price of oil, is expected to outperform other energy stocks in 2026.

What It Means for Investors