Debasement and Demand Send Commodities Roaring Higher

What You Need to Know:

• Metal and LNG prices are rising higher than previously forecast due to increasing geopolitical tensions, policy uncertainty and central bank demand.
• Gold could hit new early‑year highs, then ease later as economic and inflation pressures cool.
• Despite a tight market, silver may drop from its record highs in 2026.
• Platinum and palladium prices are elevated due to tight supply and tariff risks but are expected to fall.
• Inventory hoarding and a growing supply‑demand deficit of copper has created uniquely acute front‑end tightness expected to ease only once new supply ramps up later in the year.
• Crude oil and natural gas face tightening supply‑demand balances driven by constrained production and elevated risks.

The TD Securities Strategy team has materially upgraded the outlook for gold, silver, platinum, palladium, copper, aluminium and natural gas, from our already bullish previous projections. The crude oil forecast remains unaltered, as it already reflects our out of consensus positive market view. The 2026 average annual price outlook for the precious metals complex has been materially upgraded across the board.

The gold projection has been upgraded to an annual average of $4,831/oz, with the silver forecast jumping to $65.50/oz. Platinum has been lifted $2,063/oz, while the palladium projection jumped to $1,819/oz. The 2027 precious metals have also been uplifted.

The 2026 copper price was lifted to an average of $13,000/t, with aluminium increasing to $2,988/t. NYMEX natural gas increased to $4.09/MMBtu. WTI and Brent crude remain at $63/b and $66/b, respectively.

We expect trading highs of $5,400/oz for gold in the first half of 2026, $118/ oz for silver, $3,000/oz for platinum, $2,250/oz for palladium, nearly $15,000 for copper. WTI crude is expected to peak at just over $65/bbl in the latter part of the year, while NYMEX natural gas could continue surging amid winter weather.

Full report originally published January 26, 2026.

Our Changes vs. Prior Forecast

The metals complex forecast is higher due to the recent rally, rising and persistent tensions over Greenland, Fed independence concerns and expectations of continued strong central bank purchases. The increasing disorder in U.S. policy has the market worried that Europeans may limit their appetite for Treasuries, as we may see more tariffs, a weaker economy. and a Fed that tilts toward the max employment part of its mandate. In short, this is very much a debasement trade dynamic, with very strong retail participation, driving precious metals.

Gold

We expect relatively range-bound markets in 2026, with upside risk in the early part of the year. The Fed-driven cost of carry reductions and balance sheet expansion – along with an expected yield curve steepening and potential concerns surrounding Fed independence – prompt us to say that the yellow metal will reach a new quarterly average record in the first six months of 2026.

We think the bullish gold trend will be here for some time to come. Looming concerns remain that future Fed officials may not pursue a 2% inflation target. Also, there is speculation that the White House could aggressively lobby the U.S. central bank for lower rates at a time when U.S. debt is at record highs and growing.

These factors will continue to drive narratives surrounding the U.S. dollar (fiat currency generally) debasement, dedollarization and de-globalization, which we believe will keep official sector purchases robust as central banks continue to diversify FX reserves.

Meanwhile, the start of a broad movement away from the classic 60-40 portfolio structure to an asset mix which includes as much as a 25% commodity weighting, along with lower rates, should see investors increase their appetite for the yellow metal. However, a weakening economy, less inflation pressure, and an end to the easing cycle should also see the yellow metal consolidate below the highs in the latter part of the year.

Robust Central Bank Physical Purchases Add to Positive Purchases Add to Positive Long-Term Gold Outlook

The Start of Pending USD Weakness Gold Supportive

Silver

The combination of strong exchange-traded fund (ETF) silver and call option purchases, still historically modest and relatively illiquid London Bullion Market Association (LBMA) inventories, along with the need to hedge by market makers, has propelled silver to a new record in late-January. The outsized year over year price surge is occurring despite expectations of slightly lower industrial demand in 2026, and significantly higher LBMA inventories. Metal has flowed back to the global system, following a U.S. tariff scare and the resulting squeeze months earlier.

With tariffs unlikely to materialize this year, the white metal – trading deep in overbought territory – is projected to drop significantly sometime in 2026 once tariff unknowns are settled and momentum slows. With U.S. tariffs not being an issue, excess metal located in the U.S. should continue to flow back into the LBMA system providing liquidity and eliminating much of the current price premia. Weakish physical demand and a slowdown in investor interest could well be the trigger for the expected correction. However, a deep sustained rout is not expected.

The silver market is still projected to be in a deficit, albeit lower than in the previous several years. This implies that above ground inventories will be required to achieve balance. If we add retail bar/coin and ETF investment demand, which we continue to see as robust this year, the silver market will continue to be very tight. Since the silver market will need to be balanced by investor inventories, prices will be set well above the cost curve.

Platinum

There is relatively steadfast demand associated with autocatalyst manufacturing, firm other industrial uptake, and weak supply side growth. This is due to lower South African production and weaker than expected recycled supply are set to create tight supply-demand fundamentals over the next several years. Additionally, investor interest associated with U.S. dollar debasement and interest in commodities as financial assets, and ongoing fear that Section 232 (S232) provisions will limit free flow of metal across the world and dwindle exchange inventories, have created very tight conditions on the front end. The result is prices soaring in late-January.

While our base case assumption is that U.S. authorities choose not to enact tariffs or trade quotas on platinum-group metals (PGMs), we however see the threshold for an S232 recommendation affirming a threat to national security as relatively low. This implies that PGM tariffs or import quotas are still very much a risk, which will continue see a reduced availability of metal throughout the logistical system, limiting the market's ability to ease tight markets and soften high lease rates. But in the final analysis, we expect the metal to drop significantly from the late-year highs, as there are plenty of above ground inventories available once the market stops being preoccupied with Section 232 provision impacts.

Platinum in Squeeze Mode

Palladium

At a time of reduced government subsidies and less popular interest in environmental issues or tighter environment standards, the emergence of hybrid vehicles as a viable option to EVs has once again convinced markets that autocatalyst demand will increase over the next two years. This, along with depressed mining supply growth due to issues ranging from mine closures in South Africa, to a weak nickel market, to sanctions directed against Moscow, points to a primary deficit into 2027. We also suspect that recycled metal quantities will disappoint, as Americans keep used cars even after they purchase new ones.

These fundamental factors in combination with concerns surrounding Section 232 have caused tightness in the palladium market, sending the metal surging to multi-year highs in late-January 2026. Just like in our assessment of the platinum market, we don’t expect S232 provisions to impact palladium. But the risk of that happening is indeed very real. As such, we expect overly elevated prices until that issue is resolved, and then a move down is projected. We judge that there are plenty of above ground stocks to fill the gap between primary supply and demand, which implies prices should move down from the late-January highs.

Copper

The copper forecast was adjusted upwards by a very large amount. The key reason is lack of liquidity in the market, inventory hoarding due to globalization/232 tariff fears and a growing supply-demand deficit. The market will increasingly need to depend on above ground inventories, which are becoming less accessible due to hoarding.

In the new global trade regime, just-in-time inventory management is more difficult, which suggests higher local stockpiles. This creates front end tightness, as a deficit market needs to provide material for both inventory and fabrication demand. We expect this tightness to moderate later in the year, which will reduce prices from record levels.

The end of disruptions at Grasberg and new supply from other facilities should all help copper supply-demand fundamentals. This, along with a reduced rate of inventory accumulation is set to ease front end tightness and reduce prices, albeit to still very robust levels.

Deepening Deficits, Spec Fervour Rallying Copper

Crude Oil

Oil continues to be supported by recent Kazakhstan power outage, which has knocked out some 900k b/d of productions (7-9 days), disruptions at CPC terminal in Russia due to attacks by Ukrainian drone and ever louder rhetoric suggesting a U.S. attack on Iran. Plus, OPEC is likely to keep underdelivering on its increased production quota targets (missing targets).

The likelihood that U.S. shale production will moderate by as much as 350k b/d in the latter part of the year and that non-OPEC production is set to turn lower over the same period will also be supportive of the oil price this year. This, along with continued China inventory builds suggest that the oversupply may be less given the expected 1.2 million b/d demand growth. Add to that geopolitical risk associated with Iran and Venezuela, and oil should trend higher than the current consensus suggests.

The combination of low OPEC spare capacity and Iran war risk, which could see 17-19 million b/d of flow through Straits of Hormuz interrupted, represents a significant upside risk to oil, as the market remains positioned aggressively short.

Natural Gas

Fundamentals are skewed toward tightness this year as liquefied natural gas (LNG) plus Mexican export growth are set to materially outweigh production growth. This suggests prices will need to provide the incentive for production growth, with the higher cost Haynesville basin set to be the swing producer. We ultimately expect this production to materialize but anticipate periods of prices above our forecast providing this incentive.

Under average weather conditions throughout the year we anticipate Henry Hub will trade to incentivize larger production gains. If weather were to skew bullish, the market will be prone to outsized price increases, as we have witnessed in early-December and again in late-January. Without net bearish weather across the next three seasons (winter '25/'26, summer '26, and winter '26/'27), we see inventories dropping anywhere from -200 Bcf to -600 Bcf vs the 5yr average, which historically sees increased upside volatility.