In 2025, the global commodities market is expected to face pressure against the backdrop of sluggish economic growth and a strengthening US dollar, according to industry experts. However, a few assets like gold and natural gas are expected to rise against the trend.
Gold, known for its hedging properties, was one of the best-performing commodities in 2024, with prices rising by around 26%, marking the best annual increase in over a decade. Key drivers included continued central bank buying, escalating geopolitical risks, and market concerns stemming from US debt issues.
For 2025, gold is poised to continue its upward trend. Wall Street analysts predict that gold prices could reach $2,795 per troy ounce, with Goldman Sachs even forecasting it could touch $3,000.
JPMorgan Chase points out that additional US tariffs, escalating trade tensions, or slowing economic growth could further push up gold prices. Additionally, the “poor man’s gold,” silver, is worth noting, especially given its crucial role in solar panel manufacturing.
JPMorgan Chase forecasts that silver may experience a strong rally in the second half of 2025 alongside a revival in the base metals market.
In 2024, crude oil prices were under pressure due to weak Chinese demand and oversupply, with Brent crude prices remaining relatively flat for the year. The International Energy Agency (IEA) maintains a pessimistic outlook for the market in 2025, estimating global oil demand growth to be less than 1 million barrels per day, significantly lower than the 2 million barrels per day in 2023.
BMI indicates that in the first half of 2025, an increase in supply from the US, Canada, Guyana, and Brazil could exacerbate oversupply. If OPEC+ implements production rollback plans, market pressures will intensify. The Commonwealth Bank of Australia predicts Brent crude prices could fall to $70 per barrel.
The natural gas market in 2025 may be an exception. BMI forecasts that Henry Hub natural gas prices could rise by 40%, reaching $3.4 per million British thermal units (MMBtu). Increased demand for liquefied natural gas (LNG) and Europe and Asia’s reliance on imported natural gas are the main driving factors. The recent halt in Ukraine’s gas deliveries to some European countries has heightened supply concerns, further pushing prices up. The continued cold winter also provides support for natural gas prices.
As a key material for electric vehicles and grid manufacturing, copper soared to historic highs in 2024 due to energy transition demands. However, pressures from high inflation, rising interest rates, and a strengthening US dollar could lead to a decline in copper prices in 2025.
Iron ore may face downward price risks due to Beijing’s stimulus policies and oversupply of low-cost resources. Goldman Sachs predicts iron ore prices could fall to $95 per ton in 2025, a decrease of around 24% from 2024.
In 2024, cocoa and coffee prices surged to record highs due to supply shortages and adverse weather conditions. However, Rabobank expects prices to retreat in 2025 as high trading prices stimulate increased production while weakening demand.
Overall, the commodities market in 2025 will be influenced by global economic weakness, geopolitical risks, and supply-demand dynamics. Assets like gold and natural gas may shine, while oil, copper, and iron ore could continue to face pressure. Investors should closely monitor macroeconomic and market dynamics and tailor flexible investment strategies to address market challenges.
(This article referenced CNBC reporting)