Commodity prices started 2026 on a firm note, building on the strong momentum seen in 2025. On the MCX, copper is hovering around the ₹1,270–1,300 per kg range after rising about 42–48% last year, while silver is consolidating between ₹2.35–2.39 lakh per kg following an extraordinary 150–180% rally over the past two years.
However, on the other hand, Gold has entered a consolidation phase but remains at historically elevated levels, after a prolonged multi-year uptrend, underpinned by central bank purchases and ongoing geopolitical uncertainties, according to market experts.
Ponmudi R, CEO of Enrich Money, believes that this commodity backdrop is now translating into improved earnings visibility for metal producers, shifting investor focus from price momentum to sales growth, margins, and quarterly results.
On Friday, Gold prices edged higher in the domestic futures market supported by firm spot demand and a weaker dollar against major peers. MCX gold February contracts rose 0.69% to ₹1,36,742 per 10 grams. Meanwhile, silver prices outperformed, as MCX silver jumped 1.9%, or ₹4,600, to trade at ₹2,40,500 per kg. On the other hand, Copper prices on MCX remained flat after witnessing bullish rally, closed 0.28% down at ₹1,288.85 per kg.
What drove the rally in metals?
The strength in silver and copper is being driven by structural demand rather than short-term cycles. Silver continues to face multi-year supply deficits, while industrial demand from solar installations, electric vehicles, electronics, and AI-related applications is expanding at an estimated 20–25% pace in key segments.
Copper demand is accelerating due to electrification, renewable energy projects, EV charging infrastructure, and AI data centres, with global deficits estimated in the 120–150 thousand tonne range over 2025–26.
Gold remains supported by safe-haven demand and central-bank accumulation, helping anchor the broader metal complex even during periods of volatility.
“The rally in gold, silver, and copper through 2025 was more than a market surge—it was a signal of deeper economic shifts. A 79% increase in gold price and a historic 140% surge in silver reflected two major trends: countries moving away from holding dollars as reserves, and rising prices eroding the value of paper money worldwide. Copper’s 40% climb signals the energy transition is no longer a buzzword but a supply-constrained reality with no viable substitutes at scale,” said Rajeev Sharan, Head – Criteria, Model Development & Research, Brickwork Ratings.
Which metal stocks to buy in 2026?
Ponmudi of Enrich Money further explained that sustained metal prices have a disproportionate impact on company earnings due to operating leverage, from financial perspective.
“ For pure or near-pure metal producers, a sustained 10% increase in silver or copper prices typically translates into a 6–8% rise in revenues, a 10–15% increase in EBITDA, and a 15–25% uplift in net profit, assuming volumes remain stable. This explains why metal stocks often outperform the underlying commodity once quarterly results begin to reflect higher realizations and margin expansion,” Ponmudi said.
Ponmudi further recommends investors to buy or keep a track on these following metal stocks – Hindustan Copper, Hindustan Zinc, Hindalco Industries and Vedanta.
Hindustan Copper
Hindustan Copper remains one of the clearest beneficiaries of the copper upcycle due to its pure-play exposure. Trailing twelve-month revenues are close to ₹2,800 crore, reflecting mid-teens growth, while profits have expanded by over 40% as operating margins improved into the high-30% range. If copper prices sustain above ₹1,200 per kg through FY26 and production volumes remain steady, revenues for FY26 could grow in the 20–25% range, while profit growth could remain in the 35–45% zone. For the December 2025 quarter, revenues are expected to be meaningfully higher on a year-on-year basis, with margins remaining elevated. Markets are likely to react positively to confirmation of margin sustainability rather than absolute topline numbers, although some consolidation after the sharp stock rally would be normal.
Hindustan Zinc
Hindustan Zinc is increasingly reflecting the strength in silver prices, with silver now contributing a significant portion of profitability. The stock’s rally over the past year mirrors improving earnings visibility as older hedges roll off. Assuming silver prices remain near current levels, FY26 revenues could grow in the low-to-mid-teens, while EBITDA and profit growth could track closer to 20–30% due to higher realizations. The December quarter is expected to capture part of the late-2025 silver surge, supporting sequential improvement in margins. Any earnings beat versus expectations could reinforce positive sentiment, while short-term volatility in silver prices may lead to brief pullbacks rather than trend reversals.
Hindalco Industries
Hindalco Industries offers a more balanced exposure to the metal cycle through aluminium and copper. With aluminium prices expected to remain broadly in the $2,300–2,600 per tonne range and copper prices staying firm, consolidated revenues in FY26 could grow in the 10–15% range, while profit growth is likely to be steadier at around 15–20%. India operations are expected to remain strong in the December quarter, while global operations may introduce some variability. Market reaction to quarterly results is likely to be moderate, with the stock acting as a relatively lower-volatility participant in the metal upcycle.
Vedanta
Vedanta provides diversified exposure across zinc, aluminium, copper, and silver, resulting in higher earnings leverage but also higher volatility. With multiple commodities moving in tandem, FY26 EBITDA could remain near record levels, with profit growth potentially in the 20–30% range, supported by volumes and realizations. The December quarter is expected to show healthy year-on-year growth, and market reaction will depend largely on cash-flow strength, dividend visibility, and segment-level performance rather than headline revenue alone.
Metal stocks outlook in 2026
According to Ponmudi, the overall outlook for metal stocks in 2026 remains constructive from an earnings and sales growth perspective. Across pure-play silver and copper names, profit growth of 20–40% remains achievable if current price levels sustain, while diversified players are likely to deliver mid-teens earnings growth.
“Quarterly results, particularly Q3 FY26, will act as key validation points for the rally, shifting markets decisively into a results-led phase. While corrections are inevitable in a cyclical sector, companies with direct exposure to silver and copper, strong operating leverage, and consistent cash-flow generation are likely to remain in focus as long as structural demand drivers stay intact,” he added.
Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.
