In this edition, we turn our focus to commodities. This is an asset class at the center of inflation, geopolitics, and global growth. From energy markets to precious metals, we break down the key drivers shaping prices today, as well as the implications for both long term and speculative traders / investors. As always, we aim to go beyond headlines. Our goal is to break down what matters, why it matters, and how it connects to broader opportunities across alternative investments.

Let’s start with one of the most talked about commodities in recent months: gold. But how did gold become a commodity in the first place? Gold has been valued as a store of wealth for over 5,000 years, originally used as currency in ancient civilizations because of its rarity and durability. Later, it became the backbone of the global monetary system under the Gold Standard, where currencies were directly tied to gold reserves, ensuring stability. Under the Bretton Woods agreement in 1944, gold remained central to the post WWII monetary system until the U.S. ended dollar convertibility into gold in 1971. Gold turned from a formal monetary anchor into a strategic hedge against inflation, currency risk, and geopolitical uncertainty. Investors today use gold as a safe haven when there is high uncertainty and market volatility.

Over the last 10-15 years, gold has reinforced its reputation as an asset to combat uncertainty in the market, usually performing best during market stress, inflation concerns, and geopolitical conflicts. Unlike equities, gold doesn't generate cash flow or EPS, so investors turn to gold for more protection when consumer confidence falls. This has been especially clear during periods of economic disruption when demand increased for safe haven assets, and gold prices moved higher as investors looked for safer investments.

When looking at the 1-year comparison, we can see how strong demand for gold was (see chart below). During this same timeframe, silver increased during periods of market uncertainty, particularly as investors responded to persistent inflation concerns and rising geopolitical tensions in the Middle East. Historically, this tends to push investors towards precious metals because gold is viewed as a store of value when economic stability weakens. We can see that gold rose roughly 55%, and silver surged to about 150%, far outperforming the S&P 500s, 30% gain. This suggests that precious metals benefited from uncertainty in the market driven by tariff uncertainty and strong demand from central banks.

Looking ahead, JPMorgan Chase maintains a bullish outlook on gold; projecting prices could approach $5,000 per ounce by the end of 2026. This is supported by continued demand from both central banks and investors, despite a recent pullback due to ongoing geopolitical conflicts and investors taking profits from recent gains over the last year. This outlook reinforces gold's role as a safe-haven asset and a long-term store of value in uncertain economic conditions. If inflation, geopolitical tensions, and central bank buying remain elevated, gold can continue to attract demand and rise in price.

Sources: Morningstar, IMF, JP Morgan

Much like gold, silver’s story with humanity began more than 5,000 years ago, embedding it as one of the oldest metals to be traded and widely used throughout society. Evidence from archeological digs, places the first silver mining operation in Anatolia (Modern-day Turkey) as long ago as 3000 BCE. Then around 1000-500 BCE, the Laurium Mines became the first large scale silver operation. The mining of silver would go on to fund ancient Greece, specifically supporting the rise of the great city of Athens, including the financing of the Athenian navy fleet, and later, the beginning of a democratic system within Athens around 500 BCE.

One of the newest and most demanding drivers for the silver industry in this day and age is the global race to build artificial intelligence infrastructure. Silver is a unique metal, having the highest electrical conductivity, and strong thermal conductivity, all while acting as a noble element, meaning silver does not rust or corrode like other precious metals.

Artificial intelligence data centers, which are being built at an exponential rate, are far more silver intensive when compared to traditional data centers. On average, AI servers require at least 2-3 times more silver content, mainly due to more complex cooling systems, and denser architectures.

In addition, within the cost breakdown of AI data centers, silver makes up around 1% of total system costs. Representing a key element that is not only cost effective even during price elevations, but recently, silver has shown strong price inelasticity, distinguishing it from other AI related industrial categories.

In data chips, like GPUs (Graphics Processing Units) and TPUs (Tensor Processing Units) from Nvidia, AMD, and recently Google, silver is found in the wire bonding, chip connections, and in many PCTB’s (Printed Circuit boards). Silver is a standard element found within chips like GPU’s and TPU’s, and with the strong demand for AI computing power, silver has shown strong $/oz appreciation to over $100/oz in January of 2026.

Beyond Artificial intelligence, silver’s role in the global industrial footprint is certain. Today, solar power also known as Photovoltaics (PV), represents the single largest application for the metal, accounting for almost 29% of industrial demand in 2024, increasing from just 11% a decade earlier, reflecting a switch in demand towards clean energy. Another large demand is electric vehicles, with each EV battery requiring substantially more silver than conventional gas-powered vehicles. Finally, healthcare rounds out Silver’s usage in the modern day, the metals natural antimicrobial properties (it inhibits the growth of microorganisms) make it the best metal for surgical instruments, cardiac devices, and hospital infrastructure. Across the three sectors, silver can simply not be substituted, making the metal largely price inelastic. The broad industrial base, combined with its compounding drivers for industries, cements silver not only as a precious metal, but a critical enabler of the defining technology of the 21st century.

Forecasting silver prices involves substantial uncertainty, but the structural demand and supply dynamics as of early 2026 provide a relatively coherent directional case. The silver market has recorded five consecutive years of supply deficit, with the 2025 deficit estimated at approximately 95-200 million ounces. Above-ground inventories are being depleted at an accelerating rate due to AI and industrial needs. Institutional price forecasts for the medium term vary widely, reflecting divergent assumptions about macroeconomic conditions, monetary policy, and the pace of technological adoption. HSBC projects a range of $58 (2025 base) to $88 by 2026, under conservative assumptions. CME silver futures suggest a collective market expectation of approximately $58–$64/oz through 2030.

Sources: Silver Institute, Silver Institute #2, iShares, Sprott, IEA, IEA #2, Crux Investor

Cocoa beans were cultivated over 3,000 years ago by the Mayans to cultivate a ceremonial beverage. They were originally consumed by humans more than 5,000 years ago in Ecuador. During the Mayan and Aztec civilizations (250 – 900 AD), cocoa beans were used as a form of currency, given their scarcity. They were used to make daily purchases, trade, and pay taxes. The Mayans used a standard unit, pik which was equivalent to 8,000 cocoa beans. Aztecs used cocoa beans as a currency as well. The beans also had cultural significance since the Aztecs believed cocoa beans to be a gift from God. Christopher Columbus took the cocoa beans to Spain. However, the drink was too bitter for Europeans, so they made it sweeter by adding sugar. This led to the creation of modern chocolate, which we enjoy today, and the European market began selling this new product in stores.

The cocoa bean process starts off by harvesting beans, mainly from October to February and May to August. The beans are then fermented over 5 to 7 days, allowing the beans to accumulate moisture and a distinct flavor. Next, they are cleaned, roasted, winnowed (separation of the shell and the bean or nib), grinded, and cooled. Tempering is the most difficult part of this process because it requires heating the chocolate to precisely 110 degrees Fahrenheit, and subsequent cooling. This allows the chocolate to stabilize and form stable cocoa butter crystals. It takes approximately 400 cocoa beans to produce 1 pound of chocolate, and each cocoa tree produces ~2,500 beans a year.

Cocoa beans are traded on the New York Mercantile Exchange (NYMEX) and the Intercontinental Exchange (ICE) in London. NYMEX is based on South Asian markets while the exchange in London is priced based on African cocoa. Cocoa bean prices have been declining significantly from record highs in the last two years. It is currently trading around $3,200 – $3,300 per ton, a sharp drop from a peak of $12,000+ per ton multiple times in 2024 and 2025, which resulted from supply deficits. There has been increased rainfall in the Ivory Coast (the world’s largest cocoa producer, supplying 40-45% of the world’s cocoa beans) and Ghana. However, this steep decline can be unsustainable and detrimental to farmers who cannot sell their cocoa beans at a higher price due to increased supply. The significant rise in cocoa bean prices has led to higher chocolate and confectionery prices. Companies either raised prices or made their ‘fun-sized’ candies less fun to enjoy. Despite lower cocoa bean prices, retail candy prices have remained elevated. Candy and confectionery prices are unlikely to fall in the near-term due to a variety of factors including high sugar costs, tariff implications, crop shortages, high inflation and interest rates.

Sources: Britannica, Candy USA, ICCO, Ghirardelli, Aljazeera, Morningstar

At the midpoint of this edition, we zoom out and compare the S&P 500 against all of the commodities we are covering—gold, silver, cocoa, oil, cattle, and corn. Oil, cattle, and corn are covered in detail in the second half of this edition. Check out the full breakdown online.