Jim Wiederhold argues that commodities have reemerged as a strategic asset class, with institutional money returning for diversification, inflation hedging, and especially supply/resource security. Near term, he sees energy still elevated after Middle East disruption, while copper and industrial metals remain supported by positioning, underinvestment, and the energy-transition story. He thinks gold and silver may be consolidating after a strong multi-year run, with the stronger U.S. dollar acting as a headwind for precious metals.
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This interview is a market update built around one core thesis: commodities are back in favor, but the leadership is rotating from precious metals toward industrial metals. Jim Wiederhold says institutional investors are returning to commodities mainly for two classic reasons—diversification and inflation hedging—but adds a third and increasingly important theme: resource security. In his framing, governments and companies are now paying more attention to securing critical materials and nearby supply, which is helping drive renewed strategic allocation to the asset class. On the short-term commodity backdrop, he spends the most time on energy and copper. Energy has been front and center because of the Iran-U.S. …
Near term, the setup favors energy and industrial metals over precious metals, but crowded copper longs and a softer oil tape make the trade vulnerable to pullbacks. Gold looks more like a consolidation story than a fresh breakout unless the dollar weakens or macro stress returns.
Over the next few months, the base case is continued relative strength in industrial metals if supply constraints and electrification demand stay intact. Precious metals may drift sideways until the market gets a new catalyst, while a clearer policy or geopolitical backdrop could restart the gold bid.
The deeper regime implication is that commodities may have entered a more durable strategic-allocation phase driven by deglobalization, resource security, and the energy transition. If that holds, higher structural demand for industrial metals and persistently scarce supply become the lasting thesis, not just a trade around headlines.
Gold tends to enter a multi-year consolidation period after sustained multi-year rallies, and the current price action suggests such a consolidation phase is underway.
The speaker draws a historical pattern: after gold's 2.5–3 year run, profit-taking and a consolidation phase typically follow, which is playing out now.
What key findings has Bloomberg's research uncovered regarding trends in the broader commodity space and growing interest from institutional investors?
Jim identifies three main reasons institutional investors look to commodities: diversification benefits, inflation hedging, and a new third theme — resource security (countries/governments ensuring they have enough critical materials within their borders). Supply disruptions and the uncorrelated nature of commodities relative to other asset classes are driving renewed interest. The 2020s have already experienced inflation shocks, geopolitical disruptions, and increasing concern about finding critical resources.
Even if tensions in the Middle East dissipate, could we be in a time when we keep seeing continued emphasis on energy prices staying elevated?
Jim notes there was a huge disruption in global oil supply with 20% of oil exports shut off, some of which is coming back. Oil infrastructure disruptions may take a while to get back online. Oil prices didn't move into the $200 range partly because China pulled back on economic growth levers at a key time, reducing demand, and the US continued as the largest oil producer increasing production. There are competing forces and some softening in oil prices, making it hard to forecast with many moving pieces.
What can you say about the broader outlook for the US economy and where we could be headed as the next half of 2026 begins?
Jim says there's been a lot of uncertainty for businesses due to geopolitical issues and tariff announcements, which may have led to softening in global growth. Once there's clarity, that could lead to a ramp-up in economic growth. The stagflation call was based on historical patterns, but economic data has mostly held up. Unemployment has picked up a little and headline inflation has ticked up to some of the highest readings in 3 years, but core inflation (what the Fed cares about) has stayed relatively muted. There's a new Fed in place, creating uncertainty about the path of rate moves.
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