Rotation is the Story

The metals market just reminded everyone why commodities are not for the faint of heart.

Friday was ugly. Brutal, even. 

Gold futures closed the session down more than 11%. 

Palladium futures were off over 15%. 

Platinum futures collapsed nearly 19%. 

And Silver futures? Down more than 31% in a single day. 

The selling pressure was relentless, emotional, and indiscriminate. 

But under the surface, we're seeing major rotation in the commodities complex. As the legendary market technician and co-founder of the CMT Association, Ralph Acampora said, "Sector rotation is the lifeblood of a bull market."

While the tape in precious metals was getting torn to shreds, the broader message from the commodities market hasn’t changed. In fact, it’s becoming clearer by the day. 

This is not the end of the commodities bull market; it’s the next phase.

Back in late December, we laid out the roadmap for this next phase. 

After rallying by more than 110% from the COVID lows in just two years, our equal-weight basket of commodities was pressing up against the upper bound of a massive, multi-year accumulation pattern. 

For years, leadership was narrow. Precious metals did all the heavy lifting. 

Gold, Silver, Platinum, and Palladium carried the torch while most other commodity groups lagged behind.

Our view then was simple: 2026 would be about expansion.

That expansion is now underway.

If we start with the performance leaderboard for the first month of 2026, the rotation couldn’t be clearer.

Energy $XLE is the top-performing sector by a wide margin. 

Agribusiness $MOO is right behind it. 

And Global Natural Resources $GNR, Broad Commodities $DBC, and Materials $XLB round out the top performers. 

Five of the strongest areas to start the year all sit squarely in the real-asset, inflation-sensitive corner of the market.

On the other side of the ledger, some of the largest and most crowded sectors in the S&P 500 are struggling. 

Financials $XLF, Technology $XLK, and Healthcare $XLV all closed the month lower. 

However, money isn’t leaving equities altogether; it’s rotating from financial assets to hard assets.