I started my career at a Canadian bank in 1995. As the 1990s came to an end, markets were driven by the dot-com boom and the technology surrounding the internet. However, I chose another path: commodity markets . At the time, my colleagues and even family thought I was crazy. Commodities had broadly languished, and the new technology was clearly a game changer. While I was too green to realize it at the time, the first ingredient for a commodity supercycle was already in place. The world had spent years underinvesting in supply, and capital expenditure (capex) remained low. However, this in itself does not cause the cycle. You need demand; more accurately, a generational demand shock. Entering the new millennium, that shock hit: China . Its development, industrialization and rapidly growing middle class were the drivers, and supply struggled to keep up for the next decade. As we entered the 2020s, COVID-19 hit while the commodity setup quietly took shape in the background. Capex peaked broadly in commodities around 2012-2014, then softened, and remains below those levels. On the demand side, we at Auspice believe there haven’t been as many significant commodity drivers since industrialization and after the Second World War. There isn’t just one factor, as China was in the 2000s cycle; there are many. Our 2026 outlook is shaped by these drivers and additional macro themes, each a meaningful game changer. While gold ’s performance since 2023 has been outstanding, it is neither an inflation hedge — its move began after inflation moderated back to the U.S. consumer price index (CPI) 100-year mean of three per cent — nor does it represent commodities broadly. We will remain long (but have taken profits) if it continues to rise, but gold does not meet the criteria at present to be top of our macro list. We believe its drivers are currently more related to investor sentiment than the cycle drivers we will explore. In this way, it resembles bitcoin and has traded similarly since 2020. AI and electrification Artificial intelligence with its vast data centre needs is not just about semiconductors. It is about electrification and building out infrastructure requirements. AI’s energy needs are broad and massive but access to electricity is not keeping up. With soft 2025 prices, it appears this demand is being ignored. In fact, the International Energy Agency has warned that global energy security faces overlapping risks as demand surges, supply chains weaken and electrification accelerates. Its recent World Energy Outlook report expanded to include electricity grids, critical minerals and infrastructure. As such, the related commodity demand has widened from the obvious markets, being copper and power, to include all energy sources, including petroleum, natural gas and uranium. AI and electrification eat commodities. We require the construction machines that run on these fuels to build the infrastructure. The physical infrastructure itself requires vast amounts of iron ore (for making steel) and aluminum. Electric vehicles and renewables add further demand for lithium, cobalt, tin, nickel and zinc in addition to platinum and palladium. Look for these markets to provide opportunities beyond those seen recently in gold and silver. Deglobalization The shift to deglobalization has largely been blamed on U.S. President Donald Trump ’s protectionist tariff policies. However, this trend has been underway for a long time. Rising nationalism and populism are not new for two of the largest commodity consumers, China and India. In fact, India has more than tripled its infrastructure capex since 2019, alongside commodity export bans including wheat, rice and sugar. This comes as supplies are tight in markets such as sugar. We anticipate India could emerge as the world’s largest commodity consumer, with its middle class set to surpass that of the U.S. and China. The overall effect of deglobalization is volatility and regional price squeezes in largely similar markets. For example, wheat in North America can behave differently than in Europe or Africa. That divergence creates opportunities for commodity trading advisors (CTAs) and managers such as Auspice, who look globally. For investors, looking beyond headline commodity markets such as gold and oil is prudent. Agricultural markets The agriculture sector, namely grains and soft commodities, has provided some incredible opportunities in recent years across a broad range of markets. We have seen big trends in soft commodities such as coffee, cocoa, sugar and orange juice. But something has been forgotten. While the world keeps growing (and eating), grain prices remain near all-time lows. This is at odds with the high and rising costs of farmland, labour, fertilizer and machinery (driven by metals and energy). Given global growth-driven demand, deglobalization and shipping issues, we believe grains may provide a significant opportunity in the future. This may benefit different geographic markets in wheat, corn, soybeans and canola. Signs of change We see two main signs of change. First, while commodities have been underallocated for the past decade, there is an observable shift. Historically, pensions held 15 per cent to 20 per cent in commodity exposure. This dropped to almost nothing after 2012. The commodity cycle peaked, and quantitative easing alongside zero inflation enabled bonds to hedge heavy equity exposure. However, in a normal inflation world such as pre-2000, bonds don’t hedge equities. Now, allocations are returning to commodities. The Ontario Teachers’ Pension Plan is a clear example, currently holding an 11 per cent direct commodities allocation (up from five per cent in 2012). We expect similar levels across the space. Second, sanctions, conflicts and supply disruptions are pushing commodity shipping rates, from energy to bulk ores and grains, toward a rare year-end surge. This potentially upends global supply chains at a time of deglobalization, AI and electrification demand, and cheap agriculture markets. While we have no crystal ball, this is often a leading indicator of commodity volatility and demand. Commodities as portfolio diversifiers Commodities have historically served as a valuable diversifier in periods of inflation (normal or elevated) and high equity valuation, such as we see now. This is the most diverse asset class, far beyond the equity markets. After rallying then moderating into 2023, commodities have more broadly woken up and provided positive returns for investors in 2025. This comes on the back of what we see as early days of a potential longer-term commodity supercycle, historically lasting more than 10 years; which could mean we are not even halfway there. This is supported by strong fundamentals and considerable demand, and exacerbated by themes we have identified. For investors considering portfolio construction, this may be an opportune time to evaluate diversification beyond recent equity strength, including the role of tactical commodity strategies managed with discipline and experience. 2026 will not be the time to swing for the fences as investorsThe Federal Reserve’s rate cut was a clear signal to investors Tim Pickering is founder and chief investment officer at Auspice Capital Advisors Ltd., Canada’s largest active commodity fund manager with retail and institutional products. The views expressed are those of the author and do not constitute investment advice.