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Investors to swap cash for gold and grain on hopes for a global rebound, says UBS

UBS expects investors to rotate out of cash and into commodities in 2026, favouring energy, grain and gold on the back of expected rate cuts

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Dominic Schnider, head of global commodities and forex at UBS Global Wealth Management. Post: Themis Qi
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UBS expects investors to shift part of their holdings out of cash and into commodities such as energy and grains next year, as hopes build for an economic rebound and interest rate cuts in the coming months.
“The acceleration in economic growth will push the prices of energy and grains higher and consequently attract investors,” said Dominic Schnider, head of global commodities and forex at UBS Global Wealth Management, in an interview on Wednesday.

UBS expected the global economy to bottom out in the fourth quarter of this year and start to pick up in 2026, Schnider and other analysts said in a report.

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Some commodity sectors, such as grains and energy, still looked cheaper than equities and credit, which were trading at elevated valuations, Schnider said.

Moreover, the relatively low correlation between equities and commodities offered diversification benefits and could help cushion portfolios during periods of market stress, he added.
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At the same time, UBS said gold would remain attractive as safe-haven demand remained strong amid geopolitical tensions, even after the bullion repeatedly set record highs this year.

Schnider said the likelihood of a sharp fall in gold prices in the near term was low, unless there were a sudden surge in global growth and a “miraculous” improvement in governments’ fiscal positions.

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