Commodities surge to 48% yearly gain, dominating all asset classes in August

Commodities extended their lead over every other major asset class in August 2026, capping a month in which supply disruptions, renewed U.S.-Iran hostilities, and extreme weather combined to push prices for energy, metals, and agricultural goods sharply higher. Most other asset classes also posted gains, with property shares the lone notable exception.

A Broad-Based Rally

The iShares S&P GSCI Commodity-Indexed Trust ETF ↘ 4.09% rallied 6.2% in August, lifting its year-to-date return to 47.6% — by far the top performer among major asset classes, according to analysis by James Picerno of The Capital Spectator published on Investing.com. Foreign stocks in developed and emerging markets finished second and third for the month, while the Vanguard Total Stock Market ETF ↗ 1.54%, a broad U.S. equity proxy, gained 2.7%.investing

U.S. bonds eked out a 0.4% gain but remain slightly negative for the year. Real estate was the clear laggard: foreign property stocks fell 2.8%, slipping back into the red for 2026, while U.S. real estate investment trusts also declined amid a global surge in bond yields.investing

Geopolitics and Supply Squeeze

Renewed U.S.-Iran hostilities were the dominant catalyst. U.S. forces struck Iranian launchers while President Trump threatened Kharg Island, and Iran retaliated with attacks on the UAE and Jordan, sending Brent crude back above $90 a barrel. The U.S. Strategic Petroleum Reserve sat at 286.6 million barrels, its lowest since November 1982. In agriculture, the Bloomberg Commodity Agriculture Total Return Index ended August at a 14-year high after surging 12.4% during the month, led by sugar, wheat, and corn.vtmarkets+1

Precious metals posted some of their strongest multi-week moves in years. Gold climbed above $4,700 an ounce and silver rallied toward $70, driven in part by central banks purchasing a net 289 tonnes of gold in the second quarter — the strongest Q2 on record. Copper neared its record at $14,343 per metric tonne on the London Metal Exchange.vtmarkets

Australia's Commodity Gauge Confirms the Trend

The Reserve Bank of Australia's Index of Commodity Prices rose 15.5% year-on-year in August, easing slightly from an upwardly revised 17.2% gain in July. On a monthly basis the index increased 1.2% in SDR terms, reversing a 0.5% decline the prior month, with gains in non-rural and base metals subindices offsetting a decline in the rural subindex. Iron ore and alumina were the main exceptions to the broader advance.rba+1

Rising global bond yields — the U.S. 10-year Treasury cleared 4.75% for the first time in 19 months, while Japan's 10-year JGB yield topped 3% for the first time in over 30 years — now pose the central question for markets heading into September: whether the inflation pressures behind the commodity surge will force central banks to tighten further, or whether the rally in hard assets can coexist with higher rates.home