Commodities—particularly metals and mining—took centre stage in a big way in 2025.

Prices for gold, copper, silver, and a range of industrial metals have surged over the last year, driven by macroeconomic, geopolitical, and structural forces. What at first looked like a cyclical rally now appears to be a broader reset in how markets value hard assets.¹

To understand this shift, let’s explore why commodities are having a moment, which assets have seen success, and how metals and mining can contribute to portfolio diversification.

Why Commodity Prices Are Rallying

The current rally has less to do with speculation than with a fundamental shift in global priorities.

To begin with, central banks have become major buyers of precious metals, according to the World Bank. As inflation cooled and interest rates peaked, policymakers began preparing for a lower-rate environment, which reduces the drawbacks of holding non-yielding assets like gold and silver. At the same time, questions about the long-term dominance of the U.S. dollar have encouraged reserve diversification, reinforcing demand for precious metals.²

Geopolitical concerns also factor in. Tariffs, export controls, and sanctions have disrupted long-standing supply chains, particularly for critical minerals. Both the United States and China have tightened controls on strategic resources, reshaping global supply-demand dynamics and embedding a risk premium into commodity pricing.¹

Then there is reindustrialization. Reuters has reported extensively on how governments are actively encouraging the reshoring of manufacturing after COVID-era disruptions exposed supply chain vulnerabilities.³ Tariffs, incentives, and industrial policy are moving production closer to home, a process that is inherently materials-intensive.⁴

Finally, defence spending is rising sharply. NATO members have committed to meaningfully higher defence outlays over the coming decade.⁵ Modern militaries require not just steel and aluminum, but copper, rare earths, and specialty metals for electronics, vehicles, and advanced weapons systems. That demand is structural, not cyclical.

How Individual Metals Are Performing

The performance of individual commodities highlights the breadth of the rally.

Gold has led the way, driven by central bank buying, geopolitical tensions, and shifts in monetary policy, according to The Motley Fool. After an exceptional surge in 2025, prices appear poised for more measured—but still positive—gains as official sector demand remains elevated.

Silver has benefitted from its dual role as both monetary metal and industrial input. Solar panels, electric vehicles, and data centres all rely on silver as a component metal, layering structural demand on top of investor flows.¹

Copper has emerged as a bellwether for the energy transition, as highlighted by the World Bank. Electrification requires far more copper than fossil-fuel systems, from grid upgrades to charging infrastructure.² Prices have climbed accordingly, reflecting not only current demand but concern over future supply constraints.

Steel and iron ore tell a more nuanced story. Weakness in traditional construction—particularly in China’s property sector—has weighed on iron ore prices. Yet specialty steels and downstream metal products tied to defence and infrastructure have proven more resilient.⁵

Battery and critical minerals, including lithium and rare earths, have staged sharp recoveries after prolonged downturns. As electric vehicle production and grid-scale storage reach inflection points, markets have moved quickly to price in tightening supply.⁶

Why Investors Are Turning to Commodities

For investors, commodities now offer something increasingly scarce: diversification with tangible drivers.

Equities and bonds have grown more correlated in recent years, particularly during periods of inflation. Commodities, on the other hand, respond more to monetary policy, physical scarcity, and geopolitical risk. Amidst policy uncertainty and fiscal strain, many investors view hard assets as insurance rather than speculation. ⁷

There is also a growing recognition that supply cannot respond quickly. Mining projects take years—sometimes decades—to permit, finance, and build. When demand accelerates suddenly, so do prices. Strategic stockpiling by governments around the world has amplified this effect, particularly for minerals deemed essential to energy security and national defence.⁶

As a result, traditional valuations focused on near-term supply and demand could be underestimating prices.

The Role of Covered Call Strategies in Mining and Minerals

If commodity prices increasingly reflect structural scarcity and risk premiums over short-term fundamentals, the way investors gain exposure becomes more crucial.

Futures contracts, for example, track price and price alone, and produce returns solely through price movement. Mining equities, on the other hand, have the ability to generate cash flow that can be actively managed, distributed, or enhanced through options strategies such as covered calls. ⁸

As operating businesses, miners generate revenue and cash flow, especially when commodity prices are high. That cash flow can create an opportunity for income-oriented strategies. Covered call writing, which involves selling call options on existing equities, lets investors potentially generate option premiums while retaining exposure to the underlying shares.

In markets where commodity prices are volatile, covered calls can help monetize volatility by generating option premium income. Mining stocks, which often exhibit higher volatility than the underlying commodity, often command richer option premiums, enhancing the potential attractiveness of the strategy.

Covered call income can partially offset losses in mining equities if prices decline or stay flat. However, investors give up some potential profits if mining stocks rally sharply beyond the strike price of the sold calls. The strategy thus provides some downside cushioning while limiting gains to the covered call’s strike price plus premium.

Futures offer purity and precision. Mining equities paired with a covered call strategy offer income potential and a degree of downside mitigation—but with equity risk and limits to upside participation. For investors focused on total return rather than price tracking alone, that distinction can be meaningful.

Investing in Global Materials & Mining with BASE ETF

Looking for better yields in the materials and mining sector with less risk? The opportunity may be one (covered) call away.

With the Evolve Global Materials & Mining Enhanced Yield Index Fund (BASE ETF), investors benefit from global exposure to materials and mining stocks, with the added value of a covered call strategy applied on up to 33% of the portfolio. Covered call options have the potential to provide extra income and help hedge long stock positions. Access this sector and give your portfolio a solid BASE.

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ENDNOTES

1. Allen, B., “Why are commodity prices going crazy?,” The Motley Fool, January 13, 2026; https://www.fool.com.au/2026/01/13/why-are-commodity-prices-going-crazy
2. Baffes, J. & Temaj, K., “The Commodity Markets Outlook in eight charts,” World Bank Blogs, October 30, 2025; https://blogs.worldbank.org/en/developmenttalk/the-commodity-markets-outlook-in-eight-charts2
3. Sneha, S K & Rajan, G., “Thermo Fisher wins contracts as pharma shifts production to US, CEO says,” Reuters, January 13, 2026; https://www.reuters.com/business/healthcare-pharmaceuticals/thermo-fisher-wins-contracts-pharma-shifts-production-us-ceo-says-2026-01-13/
4. Sophia, D.M. & Varghese, A., “Global companies hit by more than $35 billion in US tariffs, but outlook stabilizing,” Reuters, October 20, 2025; https://www.reuters.com/business/autos-transportation/global-companies-hit-by-more-than-35-billion-us-tariffs-outlook-stabilizing-2025-10-20/
5. Jean, J. & Dumont, M-A., “Commodity Prices Are Expected to Increase Slightly,” Desjardins, November 12, 2025; https://coop.desjardins.com/oc/en/savings-investment/economic-studies/commodity-trends-november-2025.html
6. Hidayat, M., “Economic Forces Behind Soaring Commodity Prices in 2025,” Discovery Alert, January 2, 2026; https://discoveryalert.com.au/economic-forces-drive-commodity-price-surges-2026/
7. “Why commodities still attract investors despite their volatility,” Reuters, December 19, 2025; https://www.reuters.com/video/watch/idRW055216122025RP1/
8. “Introduction to Commodities and Commodity Derivatives,” CFA Institute, 2026; https://www.cfainstitute.org/insights/professional-learning/refresher-readings/2026/introduction-commodities-commodity-derivatives

 

SOURCE: GettyImages CREDIT: e-crow

Disclaimers:

Published February 25, 2026

Evolve Funds Group Inc. is the investment fund manager and portfolio manager. The Evolve Global Materials & Mining Enhanced Yield Index ETF (“BASE”) is offered by Evolve Funds Group Inc., and distributed through authorized dealers.

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