Favouring copper and gold as oil stalls in 2026

2026 will be a constructive year for commodities overall, with a clear tilt towards gold and copper over oil, says Daniel Greenspan, senior analyst and portfolio manager at CIBC Asset Management.

In an interview late last year, Greenspan discussed the macro drivers shaping his outlook, as well as his top picks in each sector.

Listen to the full conversation on the Advisor To Go podcast, powered by CIBC Asset Management.

Copper

The red metal hit record highs in the last few months of 2025, driven mainly by supply disruptions from major mines that have tightened the global market, Greenspan said. This year, he expected most operations to resume, though at lower levels, with output gradually rising throughout the year.

“Should demand growth fail to meet expectations, we think the copper price could experience some headwinds in 2026 if supply ramps back up and demand growth isn’t there to absorb the volume,” he said.

Looking further out into the medium term, Greenspan said electrification will be a driver of copper demand. That’s because power infrastructure is expected to increase due to new AI data centres, and copper is the key metal used in the power sector. As a result, the price of copper should rise.

Greenspan’s top equity picks in copper are Teck Resources and Hudbay Minerals.

Teck Resoures is in the middle of a merger with London-listed Anglo American. While he wasn’t keen on the price of the deal, he said the industrial rationale for combining the two companies makes sense.

“Teck shareholders have already voted in favour of the deal, and we now expect the stock to trade at a modest discount to the Anglo bid price until all regulatory approvals are received,” he said.

However, there are some catalysts for Teck Resources, particularly progress on fixes at its QB2 mine and ramp up toward full production in 2027. While execution risks remain, Greenspan said the Anglo bid offers downside protection if QB2 falters again.

Meanwhile, Hudbay Minerals is a mid-cap Canadian-listed copper producer with a good balance sheet, he said.

“It offers a solid, stable base of operations, good copper growth in the U.S., where there’s an increased focus on copper as a critical mineral, and the company also offers some exposure to gold, where we have a constructive outlook into 2026.”

Gold

Gold is sensitive to the U.S. rate cycle, Greenspan said, and typically does well when interest rates fall, and underperforms when they rise.

“We do still forecast multiple rate cuts next year from the Fed, which we expect to be supportive for gold in 2026,” he said.

Further, the ongoing theme of de-dollarization will continue to support gold in 2026, he said, with central banks steadily adding to reserves regardless of price. 

“The motivations for central banks purchasing gold include global economic uncertainty, security uncertainty, inflation, tariffs and China’s push to promote the yuan as a reserve currency,” he said, adding that given current geopolitical uncertainty, gold is a valuable portfolio hedge, historically effective against a range of tail risks.

Greenspan remains overweight in gold, favouring Barrick Mining in the large-cap space, and Alamos Gold and G Mining in the mid-cap space.

“Barrick’s operational improvements, along with balance sheet strength, are reducing the value trap perception,” he said. “The right strategic decision and execution on the production and growth plans can surface the underlying value of this company, allowing the multiple to expand.”

Meanwhile, Alamos Gold is a key strategic holding while it advances value-enhancing initiatives at its Island Gold complex in Ontario, Greenspan said. “Alamos has a solid management team, a pristine balance sheet and a track record of responsible capital allocation.”

Finally, G Mining benefits from a strong management team with a proven track record, supporting its valuation, he said. “The recent successful construction and ongoing ramp up of the TZ mine demonstrates operational expertise, and sets the stage for replicating this success at their flagship Oko West project.”

Oil

Greenspan’s outlook for oil remains subdued, due to several headwinds.

“We’re closely monitoring the manner in which OPEC’s spare capacity is being reintroduced into the market, specifically focused on the pace and the magnitude of these barrels coming back,” he said.

Further, the enforcement of new sanctions on Russia and their effect on exports should be closely watched. “Some research has projected reductions of up to 1.5 million barrels per day, but we anticipate that China and India will continue to seek opportunities to capitalize on discounted Russian oil through available loopholes, and we expect that Russian oil will continue to flow,” Greenspan said.

And he said U.S. shale production will see a modest year-over-year decline by the end of 2026.

On the demand side, Greenspan said Chinese import activity needs to be monitored, as well as implications from U.S. tariffs.

As a result, his top picks are lower-beta energy infrastructure stocks, including Pembina, TC Energy and Cenovus.

Pembina is a high-quality, undervalued company with strong fundamentals, solid management and a healthy growth pipeline, he said.

TC Energy is favoured for its natural gas and nuclear exposure, and Greenspan expected the stock to command a premium valuation versus its infrastructure peers.

Finally, Greenspan was “encouraged” after touring Cenovus’s Toledo refinary due to continued improvements and changes in personnel. And he said Cenovus’s acquisition of MEG Energy is expected to create significant synergies and bolster its upstream growth.

“The balance sheet is approaching its target, and we expect to see meaningful improvements in shareholder returns as these milestones are being achieved.”

This article is part of the Advisor To Go program, sponsored by CIBC Asset Management. The article was written without input from the sponsor.