I've always thought of commodities as the honest asset class. Stocks can be manipulated by buybacks, real estate by zoning laws, bonds by central banks. But a barrel of oil is a barrel of oil. Supply meets demand, and the price tells the truth.
Here's my read on the three commodities that matter most to my portfolio in April 2026.
Gold: $4,800 and Still Not Done
Gold is trading around $4,800 per ounce. A year ago it was near $2,700. That's roughly a 78% return in twelve months. If you'd told me two years ago that gold would be flirting with $5,000, I'd have been skeptical. I'm no longer skeptical.
The drivers are structural, not speculative:
Central bank buying. Global central banks are purchasing roughly 585 tonnes per quarter — that's over 2,300 tonnes annualized, well above historical norms. China, India, Turkey, and several emerging market central banks are systematically diversifying reserves away from US dollar assets. This isn't a trade. It's a strategic reallocation that will continue for years.
Geopolitical premium. The Strait of Hormuz crisis, ongoing tensions in Eastern Europe, and broader great-power competition have made gold the ultimate safe haven again. When 20% of global oil supply is threatened by military action, investors reach for the asset that has no counterparty risk.
Real rates. With the Fed funds rate at 3.50-3.75% and inflation running at 2.5%, real rates are roughly 1-1.25%. That's positive, which traditionally headwinds gold. But the sheer volume of central bank and institutional demand has overwhelmed the real rate signal. This tells me something deeper is shifting in how the world prices safety.
Is gold overbought? By historical standards, absolutely. Gold is trading at multiples of its 200-day moving average that we haven't seen since the early 1980s. A 15-20% correction would be entirely normal and healthy.
But I'm not selling. The structural forces — dedollarization, geopolitical fragmentation, central bank reserve diversification — are multi-year themes. A correction is a buying opportunity, not a reason to exit.
What I hold: IAU (iShares Gold Trust) as my core gold position. I prefer IAU over GLD for one reason: lower expense ratio (0.25% vs 0.40%). Over a multi-year holding period, that 15-basis-point difference compounds meaningfully. IAU has returned nearly 49% over the trailing twelve months, slightly outperforming GLD due to the fee advantage.
Position size: 5% of total portfolio. I added at $3,200 in late 2025 and haven't trimmed. My target for adding is any pullback below $4,200. I won't chase above $5,000.
Oil: The Hormuz Premium
Brent crude at $101 per barrel. WTI around $92. These are crisis prices, driven by a specific event: the de facto closure of the Strait of Hormuz following military action that began on February 28, 2026.
Let me separate the signal from the noise.
The EIA forecasts Brent will peak around $115 in Q2 2026 before gradually falling to an average of $88 in Q4. The Brent-WTI spread has blown out to $15, reflecting the physical disruption to Asian-bound crude flows. Demand destruction of 4-5 million barrels per day — roughly 5% of global supply — is already occurring, with Asia most affected.
This is a supply shock, not a demand story. The underlying demand for oil remains healthy. What's changed is the risk premium on transit through the world's most critical chokepoint.
OPEC+ is in a complicated position. They have spare capacity to partially offset the disruption, but releasing it would undermine their pricing power once the crisis resolves. They're threading the needle between short-term stability and long-term revenue maximization.
My base case: the Hormuz situation resolves or normalizes within 6-9 months. When it does, Brent drops back to $75-85 — still elevated by historical standards, but below the current crisis premium. The risk to my base case: escalation. If the military situation deteriorates further, $130+ oil is on the table, which would tip several economies into recession.
What I'm doing: I don't hold direct oil positions (no USO, no futures). Oil is too volatile and too geopolitically driven for me to hold as a core position. Instead, I own energy equities — majors like Exxon and Chevron that benefit from high oil prices but also have diversified revenue streams and dividend support if prices fall.
Energy is roughly 6% of my equity allocation. I'm not adding at current levels because the crisis premium is already priced in. If oil pulls back below $80 on a ceasefire or diplomatic resolution, I'd add to the energy equity positions.
The Dollar: Weakening, but Not Collapsing
The DXY at 98.5 is notable. A year ago it was around 99.3. The dollar has weakened about 0.8% on a trade-weighted basis — modest in isolation, but significant given the safe-haven flows that the Hormuz crisis should theoretically be supporting.
Here's what I think is happening: the market is starting to price in a structural shift in dollar demand. Central bank reserve diversification — the same trend driving gold — is gradually reducing the marginal buyer of US Treasuries. The twin deficits (fiscal and trade) are widening. And the weaponization of the dollar through sanctions over the past decade has given foreign governments a strong incentive to find alternatives.
I don't think the dollar is about to collapse. The "death of the dollar" narrative has been wrong for 50 years, and the lack of credible alternatives (euro? yuan? bitcoin?) means the dollar retains its structural privilege.
But the direction of travel is clear: the dollar's share of global reserves will continue to decline slowly, and the DXY will trend lower over the next 3-5 years. This is good for US equities (cheaper dollar helps exporters), good for gold (priced in dollars), and good for emerging market assets (dollar weakness eases EM financial conditions).
The market is pricing in zero rate cuts for 2026, with a 26% chance of a 25-basis-point cut in December. If the economy weakens and the Fed pivots toward easing, the dollar could fall more sharply. That's a tail risk I'm positioned to benefit from through my gold and international equity holdings.
How Commodities Fit in My Portfolio
I keep commodities exposure relatively simple:
- Gold (IAU): 5% of portfolio. Strategic position. Hold and add on dips.
- Energy equities: 6% of equity allocation (roughly 4% of total portfolio). XOM, CVX positions held since 2023.
- No direct commodity futures. I don't trade oil, copper, or agricultural commodities directly. The contango and roll costs eat returns over time, and the volatility doesn't match my risk tolerance.
- No crypto as commodity. Some people classify Bitcoin as digital gold. I don't. Different thesis, different position size, different risk management.
Total commodity-linked exposure: roughly 9% of portfolio. That's enough to benefit from inflationary tailwinds and geopolitical risk without letting commodity volatility dominate my returns.
The Framework: When to Add, When to Trim
My rules for commodity positions are different from equities:
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Gold: Buy during equity strength (when nobody cares about gold). Trim during panic (when gold spikes and I can redeploy into cheap equities). Counterintuitive, but the best time to buy insurance is when you don't need it.
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Energy: Buy when oil is below $75 and sentiment is bearish. Trim when oil is above $100 and the narrative is "this time is different." We're in trim territory now, but I'm holding because the geopolitical situation remains genuinely uncertain.
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Dollar: I don't trade the dollar directly. I manage dollar exposure through geographic diversification of my portfolio. European equities, real estate exposure, and gold naturally hedge dollar concentration.
Commodities won't make you rich. But they'll protect you when the things that can make you rich — equities and real estate — temporarily make you poor. In a year where oil is above $100, gold is above $4,800, and the dollar is weakening, I'm glad I have the exposure.
The portfolio that survives the next crisis isn't the one with the highest return today. It's the one with the broadest set of assets that perform in different environments. Commodities are the piece most investors are still missing.