Valerio Baselli: Hello and welcome to Morningstar. 2026 is shaping up to be a particularly intense year for commodity markets. Precious metals, industrial metals, and energy commodities are stuck between geopolitical risks on one hand and fears of a slowdown in global growth on the other.
Today we’re covering the key market drivers and the opportunities that may arise for investors with Roberta Caselli, commodities investment strategist at Global X.
Roberta, commodities have experienced months of high volatility. Overall, what should we expect for the second half of the year? And what are the key factors to keep in mind?
Roberta Caselli: Yeah, overall, markets are navigating a complex equilibrium in which energy driven inflation and shifting monetary policy expectations are enforcing volatility. So, against this backdrop, commodities may continue to face volatility in the second half of the year, with markets shaped by both cyclical and structural forces. So, on the cyclical side, the key factors remain global growth and interest rate expectations. While on the structural side, supply chain resilience and electrification appear increasingly important.
So, in particular now the divergence between short term price action and long-term fundamentals could now create selective opportunities for commodities that stand to gain from energy security concerns and geopolitical risk associated with fossil fuels. Indeed, the energy transition now is no longer viewed only through the lens of deglobalization, but it is increasingly linked to energy security. Moreover, as themes such as AI, defense, modernization and infrastructure growth evolve, the management and availability of key resources are becoming more important. So, this places commodities at the center of a broader shift, supporting cleaner energy systems while also helping to address security, supply chain and long-term industrial needs. So, this constructive outlook should be reflected in the value of commodity assets over time.
Why Uranium Could Benefit from the Nuclear Revival
Baselli: Very interesting. Now, with your help, we’d like to identify the three most promising commodities for the second half of 2026, and, of course, understand why. Let’s start with the first one.
Caselli: As a first commodity, I’d highlight uranium, as geopolitical shocks from Russia’s invasion of Ukraine to renewed tensions around the Strait of Hormuz, have reinforced how vulnerable global energy markets remain to supply disruption and strategic chokepoints. So, in this context, nuclear energy appears increasingly relevant as part of a more diversified, reliable and low carbon energy mix. Also, from a policy momentum perspective, this also appears to be improving in Europe. Italy seems to be moving closer to reintroducing nuclear power, while Switzerland is debating actually this week whether to lift its ban on new nuclear plants. Overall, European policy efforts to accelerate nuclear deployment translate into ambitions to reach 100GW of nuclear capacity by 2050. Also in the US, progress in small model reactors suggests that advanced nuclear technology is moving from concept to early demonstration, and at the same time, the USD 40 billion US Japan investment push into small modular reactors adds to this momentum. So, these demand factors, together with Middle East related supply side disruptions, may add to the case for tighter uranium conditions ahead.
Silver: More Than a Precious Metal
Baselli: All right. What is the second one?
Caselli: Yes, the second commodity could seem counterintuitive considering the macro backdrop. But the fundamental outlook is constructive for silver this year and beyond. So, the key point is the diversification of demand. Silver is not only a precious metal exposed to rates and the macro sentiment, it is also an industrial input linked to solar, electrification, technology and infrastructure. So solar remains an important demand pillar, even as substitution risks and efficiency gains may reduce silver use per panel over time. Indeed, we have seen that recent US-Iran tensions appear to have accelerated demand for cleaner, more resilient energy systems.
And so, we noted that China’s record solar exports coincided with record silver imports, suggesting that strong production and shipment volumes can still translate into meaningful silver demand. So beyond solar, silver demand is also increasingly diversified across advanced industrial applications, which accounts for roughly 58% of total demand this year, while physical investment demand is expected to rise by 20% this year. Overall, the market is projected to remain in deficit for a sixth consecutive year, with the deficit widening from 2025. So also, regarding inventory, after a period when above-ground stocks helped absorb tightness, inventory dynamics appear to be now responding more visibly to persistent deficit. So declining Shanghai and Comex inventories suggest that structural tightness may be feeding through into the physical market.
Why Battery Storage Is Fueling Lithium Demand
Baselli: Interesting. So, after uranium and silver, what is the third commodity investors should have in their portfolio for the second half of the year?
Caselli: Finally, I would highlight lithium. So, the lithium story appears increasingly broader than electric vehicles. The key themes are again energy security and battery storage. Battery storage is becoming a major incremental source of lithium demand, as grids require more flexibility to integrate renewable power. And European utilities are scaling battery installations. We have seen that they more than doubled year-on-year in the first quarter of 2026, which points to a growing role for storage in the energy system. At the same time, tighter inventories reinforce the market backdrop after a challenging period for prices and on the supply side, lithium supply has expanded significantly since 2020. However, substantial new mining supply may still be required.
Baselli: Thank you so much for your time, Roberta. For Morningstar, I’m Valerio Baselli. Thanks for watching.
