UBS Says a Major Commodity Upcycle Is Taking Shape
One day after veteran commodities strategist Jeff Currie told investors to "get long and buckle up" for the next leg of the commodities rally, UBS strategist Sagar Khandelwal issued a similarly bullish call, urging clients to "position for a commodity upcycle." Khandelwal said electrification, surging power demand, artificial-intelligence infrastructure spending, persistent supply constraints,…
Commodity strategist Sagar Khandelwal of UBS predicts a commodity upcycle is underway, caused by factors such as electrification, rising power demand, AI infrastructure spending, persistent supply constraints, and years of underinvestment. He highlights that commodities can provide returns while safeguarding portfolios from energy disruptions and inflation.
Khandelwal advises investors to maintain diversified exposure across precious metals, energy, industrial metals, and agriculture. Gold is expected to remain a useful strategic diversifier, with central bank demand, diversification away from the US dollar, and global debt concerns supporting its price. Energy exposure can protect against supply uncertainty and inflation spillovers, while industrial metals like copper benefit from secular demand drivers.
The broader commodities complex has surged to a record high, with London copper trading above $14,000 a ton, Bloomberg Agriculture Spot Index breaking out to a three-year high, and European tungsten prices exceeding $3,000 a ton.
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