On June 19, 2017, gold bars were displayed at the GoldSilver Central office in Singapore.
Sue Edgar | Reuters
Industry experts say commodity prices are expected to fall in 2025 due to a subdued global economic outlook and a recovering dollar, but gold and natural gas prices are expected to rise this year.
Commodity performance in 2024 has been mixed: While investors have flocked to gold as a hedge against inflation, prices for commodities such as iron ore have fallen amid sluggish economic growth in China, the world’s largest consumer of the metal. This year’s story is likely to be the same.
“Overall, commodities will come under pressure across the board in 2025,” said Sabrin Chowdhury, head of commodities analysis at research firm BMI, adding that a stronger dollar would limit demand for U.S. dollar-denominated commodities.
Market participants will be keeping a close eye on further stimulus measures from China, which they hope will fuel a recovery in demand for commodities in the world’s second-largest economy.
Oil prices will fall
Crude oil prices dragged down last year Weak demand in China There is an oversupply and market observers expect prices to remain under pressure in 2025.
International Energy Agency November Paints a bearish picture for oil markets in 2025predicts that global oil demand will grow to less than one million barrels per day. By comparison, production will increase by 2 million barrels per day in 2023.
Commonwealth Bank of Australia expects Brent crude oil prices to fall to $70 a barrel this year on expectations that increased oil supply from non-OPEC+ countries will outpace growth in global oil consumption.
Oil price year-on-year
BMI said in a December report that there could be a supply glut in the first half of 2025 as significant new production comes online in the United States, Canada, Guyana and Brazil. In addition, if OPEC+ plans to cancel voluntary production cuts, the supply glut will further pressure prices.
BMI noted that the demand situation in 2025 is unclear. “Global oil and gas demand remains uncertain, with solid economic growth and rising fuel demand offset by the impact of the trade war, inflation and shrinking demand in developed markets.”
Global crude oil benchmark Brent crude oil The last trade was at $76.34 a barrel, about the same level as early January last year.
Natural gas will rise
Citi analysts said global natural gas prices have risen since mid-December 2024, driven by cold weather and geopolitics.
Ukraine recently halted Russian gas supplies The impact of New Year’s Day on many European countries has brought greater uncertainty to the global natural gas market. Natural gas prices are likely to remain high as long as the cutoffs remain in place.
Cold weather for the remainder of winter in the United States and Asia could also lead to higher prices, Citi said.
BMI forecasts natural gas prices will rise about 40% in 2025 to $3.4 per million British thermal units (MMbtu), driven by growing demand from the LNG industry and increased net pipeline exports, compared with an average price of $2.4 per MMbtu in 2024 .
U.S. Henry Hub natural gas prices, as cited by BMI, are currently trading at $2.95 per MMbtu.
“LNG will continue to drive new consumption, supported by rising export capacity and strong demand in Europe and Asia,” BMI analysts wrote.
Gold adds shine
Gold prices hit record highs repeatedly last year, and the continuation of new records may continue in 2025.
Adrian Ash, research director at bullionVault, a gold investment services company, said: “Investors are optimistic about gold and silver in 2025 because they are very pessimistic about geopolitics and government debt.” He emphasized gold’s role as a hedging risk.
gold price year on year
JPMorgan analysts also expect gold prices to rise, especially if U.S. policy becomes “more disruptive” in the form of increased tariffs, rising trade tensions and rising risks to economic growth.
gold Carve it best performance of the year More than ten years last year. FactSet data shows that gold prices will rise by approximately 26% in 2024, driven by the following factors: Purchases by central banks and retail investors.
BullionVault and JPMorgan Chase expect gold prices to rise to $3,000 an ounce in 2025.
Silver and platinum could rise
Prices for gold’s close relative, silver, are also likely to rise, especially if demand for solar power (silver is used to build solar panels) remains resilient and supplies of the metal remain limited.
“Both silver and platinum have strong underlying deficit fundamentals, and we believe a catch-up trade later in 2025 could be very effective once the base metals find their footing.,” JP Morgan analysts pointed out.
Solar panels near Crawford Pass, New Hampshire. Silver is primarily used in industrial applications and is often used in the production of cars, solar panels, jewelry and electronics
Adam Jeffery | CNBC
Silver is primarily used in industrial applications and is often used in the production of cars, solar panels, jewelry and electronics. Swiss Asia Capital chief information officer Juerg Kiener said it is also needed to build artificial intelligence products and has military applications.
Precious metals trading services group MKS Pamp wrote in an outlook report that having said that, silver’s rise will depend on global industrial demand, which will be affected by Trump’s tariffs.
Copper faces demand concerns
Copper is key to making electric vehicles and power grids, and prices could fall Hit a record high this year In the context of the global energy transition.
“Trump’s policy shifts could lead to a slowdown in the energy transition, which could dampen some of the ‘green sentiment’ boosting prices in 2024,” BMI wrote in a note.
Close-up of electrical engineer inspecting copper windings in electrical engineering factory
Monty Leson | Digital Vision | Getty Images
John Gross and Co., of the eponymous metals management consultancy, told CNBC.
The metals market veteran said the mix of high inflation, high interest rates and a stronger dollar will put pressure on all metals markets.
Iron ore expected to fall
Iron ore prices may also fall due to oversupply caused by Chinese policies and geopolitics.
“Expected U.S. tariffs on China, changes in the nature of China’s stimulus policies, and new low-cost supply will drive further excess in the market,” Goldman Sachs said. He expects prices to fall to $95 per ton in 2025.
Although China may import Iron ore production hits record high this yearAccording to Reuters. Iron ore prices fell more than 24%, according to FactSet data.
cocoa and coffee
cocoa and coffee price Agricultural products dominated the soft commodities basket and hit record highs in 2024, driven by adverse weather conditions and tight supplies in key producing areas. But by 2025, demand is likely to decrease.
“Given that these commodities are trading at levels well above production costs, we expect production to expand next year while demand will contract,” Rabobank researchers say.
