If we analyze the returns of all major asset classes over the last 20 years, commodities are one of the most undervalued groups. Within the commodities space, there has also been significant price action in industrial commodities specifically — due to geopolitical reasons, tariffs, demand related to artificial intelligence (AI) and data centers, monetary policies, and more. And narrowing down further, copper has been in the thick of action over the last 52 weeks. During this period, copper has surged by roughly 38%. Considering multiple fundamental factors, it’s likely that copper will remain firm through 2026. Why?
For one, Moody’s economist Mark Zandi believes that the Fed will surprise with three rate cuts in the first half of 2026. Expansionary monetary policies, in general, are positive for industrial commodities. Specific to copper, there are also two factors driving prices higher. First, analysts expect demand for copper to remain firm from industries like data centers and defense. Secondly, supply-chain disruptions and tariffs pose a threat in terms of widening the demand-supply gap.
