Commodity Price Elasticity Drives CITIC Securities' Bullish Outlook on Precious Metals Through 2026

According to a comprehensive market forecast unveiled by CITIC Securities and reported via Jin10, multiple commodity classes are poised for significant price appreciation through 2026. The analysis reveals how price elasticity of demand—the responsiveness of consumption to price changes—will play a central role in shaping valuations across different asset categories. This elasticity dynamic, combined with structural supply constraints, positions precious metals, industrial metals, battery metals, and rare earth elements for substantial gains.

How Price Elasticity of Demand Shapes Precious Metal Valuations

Precious metals are expected to command particularly strong prices, with gold forecasted to reach $6,000 per ounce. This appreciation will be underpinned by gold’s enduring monetary attributes and its persistent appeal as a safe-haven asset during periods of economic uncertainty. Silver presents an even more compelling opportunity due to the price elasticity of demand it exhibits. The metal demonstrates extreme supply shortages combined with robust trading activity, factors that amplify market sensitivity to pricing movements. Silver prices are anticipated to surge to $120 per ounce, reflecting this heightened demand elasticity in response to scarcity.

Industrial Metals: Supply Constraints and Elastic Demand Dynamics

Copper and aluminum emerge as key beneficiaries of structural supply imbalances. Both metals face resilient downstream demand paired with persistently constrained inventories. Copper is projected to average $12,000 per ton by 2026, while aluminum prices are expected to reach 23,000 yuan per ton. These forecasts reflect a market environment where inelastic demand—consumption that doesn’t readily adjust to higher prices—combines with limited supply, creating sustained upside pressure across the industrial metals complex.

Battery Metals: Strategic Value Amid Supply Quotas

The battery metals sector stands at the intersection of energy transition and geopolitical supply management. Lithium prices are anticipated to range between 120,000 and 200,000 yuan per ton, propelled by escalating demand from energy storage battery applications. Cobalt prices face influence from production quota reductions, with projections spanning 400,000 to 500,000 yuan per ton. Nickel presents another compelling opportunity, with Indonesian quota reductions expected to drive prices toward $22,000 per ton. The price elasticity of demand for these battery metals remains constrained due to their criticality in clean energy infrastructure.

Rare Earth and Strategic Materials: Premium Outlook Beyond 2026

A constellation of strategic materials—including rare earths, tungsten, tin, and natural uranium—are positioned to benefit from persistently tight supply-demand dynamics. These materials enjoy premium valuations tied to their irreplaceable roles in modern manufacturing and defense applications. CITIC Securities’ forecast allocates rare earths to a 600,000 to 800,000 yuan per ton range, tungsten to 450,000 to 550,000 yuan per ton, tin to 450,000 to 500,000 yuan per ton, and natural uranium to $100 per pound. The limited price elasticity of demand for these commodities—reflecting their non-substitutable nature—ensures that supply constraints translate directly into price appreciation.

Market Implications and Investment Framework

The 2026 commodity outlook synthesized by CITIC Securities underscores a fundamental market reality: when price elasticity of demand remains low across multiple asset classes, structural supply shortages become the dominant driver of valuations. This framework applies consistently whether examining precious metals’ safe-haven functions, industrial metals’ infrastructure requirements, battery metals’ energy transition imperatives, or strategic materials’ geopolitical significance. Investors navigating this landscape should recognize that these price forecasts reflect not speculative momentum, but rather the mathematics of constrained supply meeting inelastic demand.