UBS recommends favoring commodities as an inflation hedge and portfolio diversifier amid geopolitical tensions between the US and Iran. The outlook is particularly positive for gold, energy, and industrial metals due to supply constraints and secular demand trends.
Key Takeaways
- 1.Commodities provide a hedge against inflation and supply shocks, showing historically low correlation with equities and bonds.
- 2.The US-Iran conflict is a major driver of current market volatility, particularly affecting energy and gold.
- 3.Industrial metals like copper are supported by secular themes including electrification and AI infrastructure buildout.
Table of Contents
- Favor commodities
- Diversify with broad commodities
- Gold
- Energy
- Industrial metals
- Global asset class preferences definitions
- Appendix
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Authors
Sagar Khandelwal
Securities
XAUBrent CrudeCopper
Themes
Geopolitical Risk DiversificationInflation HedgingEnergy Transition and AI
Regions
Middle EastGlobalUnited StatesIranSwitzerland