Commodities To Outperform Stocks

2026 is shaping up to be a pivotal year for global liquidity, with the US government facing an enormous refinancing task—around US$9–10 trillion, or roughly 25% of its total debt.

Unlike central bank-led Quantitative Easing, which primarily inflates financial assets like equities, this wave of liquidity—driven by Treasury spending—enters the real economy directly. With macro liquidity having peaked and central bank QE not expected in the first half of 2026, we face a shift in capital flows: from Fed-supported financial markets to Treasury-driven economic activity.

This redirection away from Wall Street and toward Main Street is expected to benefit the real economy, while putting downward pressure on overinflated equity markets, which have been propped up by years of persistent QE.

In this environment, commodities are well-positioned to outperform equities.

Beyond performance, this liquidity shift brings significant structural risks—such as a rising debt-to-liquidity ratio, pressure in repo markets, and flattening yield curves. These all point to a preference for real assets and inflation hedges over speculative risk.

From a cyclical perspective, many key commodities—including gold, silver, bitcoin, oil, and natural gas—are approaching major cycle lows, with strong upward moves likely from late 2026. This would align with the timing of Treasury liquidity filtering through the economy.

Among commodities, gold and silver stand out due to their dual roles: as both monetary assets and industrial inputs. Gold remains a trusted hedge against systemic financial risk, while silver also benefits from industrial demand and renewed speculative interest—particularly following its recent monetisation by India’s central bank (RBI).

From a technical standpoint, the 12-month Stoch RSI for the S&P 500 has reset from overbought to oversold. Historically, this setup has led to multi-year periods of sideways equity markets, often coinciding with gold outperformance. 

While the crowd chases tech and AI narratives, long-term investors are gradually rotating into underappreciated but essential resources—building positions steadily over time.

Although commodities may see short-term weakness into the 2026 cycle lows, this period is likely to present opportunities for strategic accumulation.

As we transition from one macroeconomic regime to another, gold and silver continue to provide a steady anchor—underpinned by intrinsic value, decentralisation, and a proven history—while fiat-based systems shift under the weight of debt, policy, and change.