Perspectives · Commodities · 2026
Why commodity prices spike
Most commodities cannot be produced quickly in response to price. A mine or an oil field takes years to build, a harvest comes once a year, and storage is limited. When supply is disrupted, or even when the market fears it will be, prices can rise sharply.
The archive shows the pattern in oil in 2022 and 2026, in European gas in 2022, in nickel in March 2022, in cocoa in 2024 and in copper and silver in 2024 and 2025. High prices then draw out new supply and reduce demand, and the price can fall as sharply as it rose, as lithium did in 2023.
Commodity investments are therefore driven by supply conditions, by geopolitics and by the dollar and interest rates as much as by the everyday demand for the goods. They can diversify a portfolio, and they can be volatile.
General information only; not investment advice. Read the risk warning.