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Emkay Global Financial Services, in its first edition of the Exclusive Commodities Conference, ‘Mining for Alpha: Strategic Commodities in Institutional Portfolios’ brought together perspectives from across the commodities, treasury and investment ecosystem to examine the evolving role of commodities in modern portfolios. Held at Sofitel Mumbai BKC, the conference highlighted that commodities are increasingly moving beyond their traditional role as a hedge, with investors and institutions looking at precious and industrial metals through the broader lenses of asset allocation, diversification, liquidity and risk management.

The discussion highlighted the growing financialisation of gold in India, the expanding commodity derivatives market and the structural demand emerging for industrial metals such as copper and aluminium. As of August 2026, gold ETFs in India had assets of approximately Rs1.91 lakh crore, while silver ETFs accounted for another Rs85,000–86,000 crore.

Gold ETF assets had risen from around Rs72,500 crore in August 2025 to Rs1.91 lakh crore in August 2026, representing growth of approximately 164% in a year. The trend points to a gradual shift in how Indian investors access precious metals, with gold increasingly finding a place within financial portfolios alongside its traditional role as jewellery and physical savings.

Rahul Rege, CEO - Broking, Emkay Global Financial Services said “Commodities are increasingly becoming an important part of the broader investment and risk-management conversation. The opportunity today is not simply about trading commodities, but about helping investors and corporates understand allocation, diversification and risk. As commodity markets become deeper and more institutional, the role of broking firms must evolve from execution to becoming multi-asset advisors and risk-management partners.”

Jaya Premchandani, VP - Broking, Emkay Global Financial Services said “The commodity opportunity is becoming much broader than simply tracking prices. Investors and businesses need to understand the structural forces driving demand, the supply dynamics and the risks associated with commodity exposure. As participation grows, a more informed and disciplined approach to commodities will be critical for institutions looking to integrate them into broader portfolio and risk-management strategies.”

She further added, “As India’s commodity markets deepen, the opportunity is evolving beyond traditional directional trading. Market participants are increasingly looking at relative-value, spread and arbitrage strategies that focus on price dislocations across maturities rather than simply taking a view on the underlying commodity. Calendar spreads, for instance, can help institutions and corporate treasuries capture opportunities arising from differences between maturities, while factoring in financing, storage, liquidity and underlying supply-demand dynamics. We believe such spread-based and arbitrage strategies will become an increasingly relevant part of institutional portfolio construction, capital efficiency and risk management as the Indian commodity ecosystem matures.”

The growing relevance of commodities is also reflected in the broader shift towards asset allocation. Multi-asset allocation funds in India had assets of more than ?2.07 lakh crore in August 2026, up nearly 57% from the previous year, with the category recording positive flows for 60 consecutive months. While these funds are not commodity funds and their entire assets cannot be considered commodity exposure, the trend reflects a broader change in investor behaviour — from focusing solely on individual securities to building portfolios capable of navigating different economic environments.

Gold continues to occupy a distinct position within this evolving framework. Ms. Sheela Kulkarni, Head of Market Development, Investments and Institutional Investor Relationships, India, World Gold Council, highlighted the strategic role of gold in portfolios, saying, “When you look at a portfolio construct, what’s important to have is a portfolio that gives you returns, that actually is a well-diversified portfolio, but is also providing liquidity when you need it the most. And we think that gold actually does all three.”

Sheela also highlighted the changing dynamics of gold demand and the metal’s continued relevance beyond traditional jewellery consumption. According to her, 2025 was one of the strongest years for gold performance, with the metal delivering returns of more than 60% across almost all currencies. Gold also began 2026 on a strong note, recording 11 new highs in the first two months. At the same time, the composition of demand is changing, with jewellery accounting for a smaller share of consumption as younger consumers increasingly prefer lighter jewellery and allocate spending towards experiences and other products.

Central banks remain an important component of the gold demand story. Sheela noted that emerging-market central banks hold an average of around 15% of their reserves in gold, compared with approximately 30% for developed-market central banks, indicating scope for continued accumulation. India has also remained an active participant in this trend, with the RBI purchasing approximately 75 tonnes of gold in 2024, making India the third-largest central-bank buyer that year.

Against this backdrop, the investment case for gold is increasingly being viewed strategically rather than only as a short-term hedge. Its combination of returns, diversification and liquidity can make it relevant within portfolios across different market environments. Gold’s liquidity can also assume greater importance when investors need to rebalance portfolios, particularly during periods of heightened uncertainty or changing economic conditions.

The case for commodities extends well beyond precious metals. Copper, aluminium and zinc have traditionally served as indicators of economic activity, with demand rising alongside construction, manufacturing and infrastructure investment. Increasing electrification, renewable energy infrastructure, transmission networks and technology-led infrastructure are now adding new structural demand drivers for industrial metals.

Aurobinda Gayan, Founder & CEO Bluglance Consulting Private Ltd said, “Copper is often called the next gold, and the data supports a good part of that view. Over the past four and a half years, it has been the best risk-adjusted performer among base metals, with the highest returns, the lowest volatility and the strongest Sharpe ratio. But institutions looking at industrial metals need to look beyond price, at carry costs, the shifts between contango and backwardation, and the supply constraints that will shape this market for years.”

The discussion also highlighted annualised return, volatility, carry and risk-adjusted performance as important parameters in evaluating industrial metals. Based on data presented at the conference covering 2022 to September 2026, copper ranked first among the six non-ferrous metals considered on annualised return, while also recording the lowest volatility and a high Sharpe ratio.

The scale of India’s commodity derivatives ecosystem further underlines the growing importance of the asset class. Average daily futures and options turnover on MCX reached approximately Rs5.4 lakh crore during FY2025-26, while close to 20.9 lakh clients traded futures and options during the year. Precious metals continued to dominate activity, with gold accounting for approximately 43% and silver around 34% of futures turnover in Q4 FY2025-26. At the same time, expanding institutional participation and the development of markets for energy and industrial metals point towards further evolution of the commodity ecosystem. From a volume-building perspective, the deepening exchange ecosystem, including NSE, could support greater participation and liquidity as commodity markets broaden across retail, institutional and corporate participants.

NSE is witnessing strong growth in Crude Oil and Natural Gas volumes and is increasingly focusing on EGRs, indicating a significant push into the broader commodities market.

The regulatory environment is also evolving. SEBI’s recent approval to expand FPI participation in non-agricultural commodity derivatives is timely in the context of the institutionalisation of the asset class. The framework widens FPI access to non-agricultural commodity index derivatives and non-cash-settled non-agricultural commodity derivatives, subject to safeguards around delivery and position management. The move is expected to support broader institutional participation and liquidity in the domestic commodity derivatives market.

The broader shift underway in commodities reflects a changing approach to investment and risk management. From the financialisation of gold and the growing role of silver to the structural demand drivers shaping industrial metals, commodities are becoming increasingly connected with India’s financial markets, infrastructure ambitions and economic growth. As participation deepens across investors, corporates and institutions, the focus is increasingly moving from short-term price movements to understanding the larger forces shaping commodity markets — and the role these assets can play within diversified portfolios and sophisticated risk-management frameworks.

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