Why the Real Assets Boom Still has Room to Run

Author: Richard Fisher

February 17, 2026

Since last April’s “Liberation Day” tariff tantrum, the resilience of real assets, especially commodities, has been nothing short of impressive. The overall S&P Goldman Sachs Commodity Index (GSCI) rose by nearly 14% from April 8, 2025, to Feb. 8 this year, but some of its constituents have been true superstars. Chief among them: silver, which gained more than 165% over the same period, and gold, which rose by more than 65% over the same period. Not surprisingly, such spectacular gains have led many market-watchers to ponder whether the tide must inevitably turn in 2026.

Given the recent performance of well-followed commodities like gold and silver, they are perhaps justified in their concern. But our view is rather more nuanced. The recent surge in real assets has been driven by a number of factors that, we believe, go beyond risk-off market sentiment or investors’ “fear of missing out.” And those factors may be driving a structural shift in the way real assets correlate with securities-based asset classes. Given the sectoral tailwinds and this potential transformation, there may be no better time than now to consider real assets as a key component of portfolio diversification.

A structural shift for commodities

An analysis last November by Bloomberg’s macro strategist Skylar Montgomery Koning cogently outlines this shift. Beginning with the premise that the primary function of assets other than stocks and bonds in a portfolio is to diversify risk, she notes that commodities returns have generally been positively correlated with a 60%/40% equity/bond portfolio since the Great Financial Crisis of 2008. This period of correlation was marked by subdued inflationary pressures. The result was that commodities generally neither contributed positively to portfolio returns nor functioned effectively as an inflation hedge.

In the post-COVID era, however, those conditions appear to be changing. As Koning notes, “deglobalization, large fiscal deficits, demographic shifts, climate change and heightened geopolitical tensions” are stoking supply-driven inflation risk. Meanwhile, the correlation between commodities and traditional assets has probably peaked—and has, in fact, been weakening strongly over the past year or so. Such an environment, Koning argues, recalls the 1987-1992 period, when commodities were negatively correlated with stocks and bonds and provided a real hedge against inflation.

It is a compelling argument, because the structural drivers Koning observes remain in place. We’re now firmly in a period where the assumptions that supported 30 years of globalization are breaking down. The Russia–Ukraine conflict accelerated a shift that was already forming: countries are becoming less willing to rely on global systems, global trust and global supply networks. Fractured supply chains, higher inventories and sticky above-target inflationary pressures are the new realities emerging from the structural decline of globalization and the rise of fragmentation.

Investable themes

In the face of this transformation, investors should consider repositioning toward real assets, resilience and strategies that assume less global integration and more regional competition. Such a rebalancing, however, should take into account that there will be winners and losers even within the real assets class. In a world of declining trade stability and potentially slower growth, we believe oil, certain chemicals and packaging could be underperformers, while utilities should be relatively stable. On the other hand, AI infrastructure and defence-related assets enjoy clear sectoral tailwinds, and gold and other metals may benefit from sticky inflationary pressures and demand trends.

Here, we look more closely at three commodities that merit watching in 2026.

Gold: No longer just a tactical hedge

We are witnessing a historic re-rating of gold. Throughout the previous decade, the metal struggled against a strong U.S. dollar and rising real yields. Today, however, the landscape has fundamentally changed, and gold is becoming the cornerstone of a new, multipolar financial architecture. In our view, gold is no longer a tactical hedge, but a strategic necessity.

Rising demand is one reason. Global central banks have more investments in gold than in U.S. Treasuries at current prices, with many governments having purchased gold since Russia’s invasion of Ukraine in 2022. Net official‑sector purchases topped 1,000 tonnes for three consecutive years (2022–2024) and continued at a robust pace through 2025, according to World Gold Council (WGC)/ International Monetary Fund (IMF)‑based tallies. Meanwhile, physical gold‑backed ETF inflows in 2025 totalled more than the prior three years of outflows combined, and a new marginal buyer, the gold-pegged crypto token Tether, has added a non-traditional, crypto-native demand channel. (Tether’s physical gold reserves now resemble those of a medium-sized country’s central bank reserves.)

On the other side of the demand-supply ratio, however, miners face significant hurdles in ramping up gold production. Finding economically viable deposits is arduous, time-consuming work. Permitting timelines from governments around the world, driven in part by environmental regulations, are getting longer, not shorter. New mine supply might someday be able to meet rising demand, but that will likely take years, if not decades.

Many financial market analysts have been raising medium-term gold forecasts only to have to revise them amid rising prices. Yet they generally continue to agree that gold will revert to the mean over time. We tend to disagree. Structural factors, including demand and supply dynamics and macroeconomic forces, continue to support a bullish outlook in 2026.

Given a decade‑high and still‑rising gold share in reserves, ETF participation re‑onboarded, and new non‑traditional buyers like Tether augmenting physical demand, we maintain a constructive bias on realized prices into 2026. The bull case for gold is supported by “Fiscal Dominance”—the reality that the US cannot afford high interest rates due to its debt servicing costs, necessitating a weaker dollar and lower real rates.

There are risks, of course. Gold’s premium to its 10-year moving average at the end of 2025 was the highest since 1980, and a modest normalization in 2026 could see prices retrace to the US$3,500-US$5,000 range. Yet we maintain a constructive bias on realized prices into 2026.

Silver: An expected downturn

Silver’s recent fall from record highs is hardly surprising to us. The remarkable rise in its price had all the earmarks of speculation trumping fundamentals even if real-world liquidity constraints had also been driving the rally. Indeed, it was near the end of 2024 that concern over trade policy spurred material flows of silver, along with lithium, platinum group metals and nickel into U.S. warehouses ahead of potential tariffs. Then, after those metals sold off mildly as President Donald Trump decided against tariffs in mid-January 2025, a bipartisan bill in Congress created a US$2.5 billion stockpile of these materials, dubbed the Strategic Resilience Reserve on U.S. soil. The result: market liquidity in silver, which was already strained, tightened even further as more of it was effectively locked in the U.S., thus creating a potent tailwind for the silver price.

But while liquidity is likely to remain a favourable issue for silver prices, we believe silver’s relative value to gold to be a headwind of potentially greater proportions for the time being. Based on about 10 years of history, the gold:silver ratio (a calculation of the ounces of silver needed to buy one ounce of gold) should be in the range of 75-90 to 1, yet in early February it stood at 46 to 1. This is not the first time that the gold:silver ratio has gone to an extreme, but every time it has in the past, it has corrected—just as it has in recent days to now sit closer to 62:1.

Granted, that’s still a long way from the longer-term norm and given the current gold price (about $5,000 per ounce), it’s our opinion that silver could pull back even further to the US$60-US$70 range (from US$80 an ounce currently) before it starts to settle again.

Copper: Is orange the new yellow?

Copper deficits typically have a bullish impact on prices because of fundamental supply-demand dynamics. Global copper markets are facing an unprecedented crunch due to years of underinvestment in mining and metals. Over the past decade, both China and the U.S. have been stockpiling copper, draining the amount that’s freely available for trade. At the end of 2025, only about 11 days’ worth of unencumbered copper inventory remained globally, compared to the headline figure of 53 days, according to TD Securities. This means that the copper available for purchase was (and no doubt is) far scarcer than it appeared, and the market may be at risk of running out of easily accessible copper if current trends continue.

Copper is essential for industries ranging from construction to electronics and electric vehicles. The combination of low inventories, ongoing demand growth (especially from data centres and EVs), and geopolitical factors like U.S. tariffs and Chinese strategic reserves is creating a situation where, if stockpiling continues at the pace seen in 2025, the rest of the world could be starved of copper.

The market will likely try to resolve this tension through higher prices and incentives to release stockpiled copper. Possible pressure release valves include the removal of U.S. tariffs, substitution of copper with other metals like aluminum, a global recession reducing demand, or China releasing some of its strategic reserves. For investors, this means copper-related investments (like mining stocks or commodity funds) could see significant bouts of volatility. Scarcity and market tension mean price swings could be sharp and government actions (tariffs, strategic reserve release, industrial input substitution, and so on) could quickly change the supply/demand balance and thus the price.

However, none of these “solutions” are guaranteed or likely to be sufficient to fully address the scarcity issue. Investors should expect more volatility, higher premiums, and potentially record-high prices for copper through 2026.

The views expressed in this blog are those of the author and do not necessarily represent the opinions of AGF, its subsidiaries or any of its affiliated companies, funds, or investment strategies.

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