Commodities are starting 2026 with momentum, and asset manager Ninety One Plc (NINTF) is calling gold and copper the most compelling plays in the space right now. But here's the catch: this isn't a blanket "buy commodities" story. The firm is crystal clear that selectivity and flexibility matter more than ever.

In its Natural Resources 2026 Outlook, Ninety One argues that structural demand drivers, tight supply, and rapidly improving mining margins create a constructive setup. Still, volatility remains the defining characteristic of the asset class, which means investors can't just buy the index and call it a day.

Why Gold Still Shines

Gold remains front and center, supported by a combination of macro tailwinds. A softer U.S. dollar, heightened geopolitical risk, expectations of lower real rates, and persistent central bank buying all form a solid foundation. What's particularly interesting is how this price strength translates directly into profitability for gold miners—margins are expanding much faster than costs are rising.

"Gold's rally has been powerful, but it has also been grounded in fundamentals that are still very much in place. With real rates likely to fall and central banks continuing to diversify their reserves, we see more reason for gold to consolidate or edge higher than to sell off sharply," said portfolio manager George Cheveley.

The firm views selective gold miners as particularly well-positioned, given their expanded margins and strong cash generation. As a reference point, the VanEck Gold Miners ETF (GDX) is up 13.43% year-to-date.

Copper Takes the Lead on Base Metals

Copper leads Ninety One's base metals outlook, and for good reason. Supply disruptions, low inventories, and surging demand from data centers and power grids have pushed prices sharply higher in 2025, and those pressures haven't disappeared.

Cheveley describes copper as the tightest of the major base metals heading into 2026. The balance between supply and demand still favors producers, which is exactly where you want to be as an investor. He also sees a tailwind for aluminum as substitution demand for copper kicks in when prices get too high. That said, longer-term capacity additions could cap the upside beyond the near term.

Energy Markets Poised to Bottom Out

The outlook on oil is more nuanced. Ninety One is cautious in the near term as the market absorbs incremental supply, but expects conditions to improve later in the year as spare capacity diminishes.

"Overall, we expect oil to find a bottom during the first half of 2026 and to recover later in the year as it becomes clear that both OPEC and US shale are operating near capacity," said portfolio manager Paul Gooden. He added that while geopolitical developments, including in Venezuela, add uncertainty, select energy equities could benefit as the cycle turns.

The State Street Energy Select Sector ETF (XLE) is up 6.67% year-to-date, reflecting some of this optimism.

The firm is also constructive on select agricultural equities, expecting tightening grain markets ahead. Lower prices are already discouraging planting in some regions, while demand from biofuels and livestock feed remains resilient, setting the stage for better supply-demand balances.

The Tin Market Shows Why Selectivity Matters

While Ninety One is positive on commodity momentum overall—particularly for gold and copper as high-momentum plays—the firm cautions that two factors are critical: high selectivity and the flexibility to adjust as individual stories develop.

The tin market provides a perfect example of this dynamic. Tin prices on the London Metal Exchange have rallied over 30% year-to-date, hitting a high of $54,760 per ton on Wednesday. That sounds great, right?

But look closer. Despite the heavily concentrated market, tin supply has actually been improving in recent months. During the previous 2022 price peak, LME inventories sat under 5,000 tons. Since October, they've climbed from 11,000 to 19,000 tons. The headline story looks bullish, but the underlying fundamentals have shifted.

"An active and highly selective approach is essential in this environment. The headline story for a commodity can look positive, but the range of outcomes at the company level is wide," Gooden concluded.

That's the real takeaway here. Commodities may be entering 2026 on firm ground, but blanket exposure won't cut it. The winners will be those who can differentiate between companies that genuinely benefit from these macro trends and those just riding the narrative. Gold and copper look strong, energy could turn around mid-year, and agricultural markets may tighten—but success depends on picking the right stocks within those themes, not just buying the sector.