The 2026 Fiscal Stimulus and Contrarian Course on the Commodities Markets

Recording date: 23rd December 2025Olive Resource Capital executives are positioning against consensus views heading into 2026, predicting commodity strength driven by unprecedented fiscal stimulus rather than the widely anticipated recession that has dominated economic forecasts for three consecutive years.Sam Pelaez, President, CEO, and CIO, identified oil as his top commodity performer despite—or rather because of—overwhelming bearish sentiment. With Atlanta Fed GDP tracking above 3%, Federal Reserve liquidity injection, and Chinese expansionary fiscal policy, Pelaez argues the global economy will surprise to the upside. He characterised oil as "the most hated commodity" trading in oversold conditions, positioning it for recovery as excessive negative positioning unwinds against improving fundamental backdrop.Executive Chairman Derek Macpherson selected platinum as his best performer, citing structural market deficits and anticipated regulatory shifts. The critical catalyst involves potential rollback of electric vehicle mandates eliminating internal combustion engines by 2030-2035. Such policy reversals would extend ICE production timelines, directly supporting platinum demand through catalytic converter applications in a tight, supply-constrained market.In their most controversial prediction, both executives identified silver as likely to disappoint relative to extremely bullish expectations. Pelaez noted that 25-year volume-weighted data suggests silver has already corrected to average levels, with the biggest move occurring over the past eight weeks. He anticipates commodity leadership rotating from precious metals to industrial commodities as economic growth accelerates, reducing speculative interest in silver despite positive underlying fundamentals.The executives' no-recession call underpins their constructive commodity stance. Macpherson emphasized unprecedented government deficit spending globally—China's trillion-dollar stimulus, aggressive US spending, European defense funding—combined with Federal Reserve rate cuts creates liquidity-driven conditions favouring commodity performance. He stated this liquidity flow makes recession unlikely despite three years of predictions, instead creating stagflation environment supporting material demand.Specific equity opportunities include Ivanhoe Mines as top portfolio performer, offering exposure to one of the world's five largest copper mines with smelter entering commercial production this quarter, plus PGM phase one commissioning and premier zinc deposit. Pelaez highlighted severe scarcity of investable copper opportunities enhancing Ivanhoe's positioning.Merger and acquisition targets identified include Arizona Sonora in copper, where Rio and Hudbay involvement creates competitive tension and neighbour Ivanhoe Electric requires the asset for project viability. In gold, Aurion Resources adjacent to Rupert Resources in Finland faces increasing opportunity cost of inaction after 24 months without transaction. CANEX Metals pursuing hostile merger with Gold Basin neighbour represents classic merger arbitrage opportunity with potential dollar valuation from current 15-16 cent levels.Contrarian dark horse positions suggested in deeply depressed nickel and lithium markets, where extreme bearish sentiment and technical oversold conditions may create rebound opportunities despite uncertain fundamental timing.Geopolitical wild card involves potential Ukraine peace resolution, which executives believe would trigger reconstruction-driven commodity demand surge rather than market weakness from returning Russian supply. They note Russian oil already trades globally at discounts, suggesting peace could actually tighten markets as Russia reprices exports.The Olive Capital framework prioritises positioning against sentiment extremes—buying oversold energy whilst tempering precious metals expectations—rather than confident directional forecasts, explicitly acknowledging uncertainty whilst providing actionable investment thesis for navigating 2026 commodity markets.Learn more: https://cruxinvestor.comSign up for Crux Investor: https://cruxinvestor.com