The global commodities market in 2025 presents a mixed outlook, with some assets poised for growth while others face significant headwinds. This year, gold and natural gas are expected to perform strongly, whereas oil and copper may encounter challenges due to macroeconomic and geopolitical factors.
Gold: A Safe Haven Shines Bright
Gold is predicted to maintain its bullish momentum after a strong 2024, where it gained 26%, reaching multiple all-time highs. Key drivers include:
- Inflation and Geopolitical Risks: As a hedge against economic and political instability, gold remains a favored asset.
- Central Bank and Retail Demand: Both institutional and retail investors continue to bolster the yellow metal's demand.
- Price Forecasts: Analysts at BullionVault and JPMorgan foresee gold exceeding $3,000/oz in 2025, especially with potential economic disruptions and higher trade tensions under Trump’s administration.
Silver and platinum are also expected to rise, supported by industrial demand, particularly in solar panels and electronics.
Natural Gas: Rising Amid Geopolitical Tensions
Natural gas prices are projected to increase by 40% in 2025, driven by:
- Cold Weather and Geopolitics: Russia's gas supply cuts to Europe and strong demand in Asia add upward pressure.
- LNG Expansion: Growing liquefied natural gas demand in Europe and Asia supports price growth.
Analysts expect U.S. Henry Hub natural gas prices to average $3.4/MMBtu this year, up from $2.4 in 2024.
Oil: Slipping Under Pressure
Oil prices face a challenging year due to:
- Weak Demand and Oversupply: Increased production from non-OPEC+ countries and stagnant global demand weigh on prices.
- OPEC+ Dynamics: Potential rollbacks on production cuts could exacerbate oversupply.
- Price Predictions: Brent crude is forecast to fall to $70/barrel, down from its current $76.34.
Copper: Facing Demand Challenges
After hitting record highs in 2024, copper prices are expected to decline:
- Policy Shifts and Demand Concerns: Trump’s policies may slow the green energy transition, reducing copper demand.
- Macroeconomic Factors: High inflation and a strong dollar further pressure prices.
- Analyst View: John Gross predicts continued downward trends, reflecting weaker industrial demand.
Other Commodities: Mixed Signals
- Iron Ore: Prices are expected to fall to $95/ton due to oversupply and weaker Chinese stimulus.
- Cocoa and Coffee: Record-high prices in 2024 may see a correction as production expands and demand contracts.
Forex Implications for Traders
The 2025 commodities landscape offers strategic opportunities for forex traders:
- Gold Rally: A weaker dollar or geopolitical uncertainties could spur gold’s rise, impacting safe-haven currencies.
- Oil Weakness: Falling oil prices may affect petro-currencies like the Canadian dollar and Russian ruble.
- Natural Gas Growth: Rising gas prices could strengthen currencies of major exporters like Norway.
While commodities navigate diverse challenges, forex traders can leverage these trends to adapt their strategies effectively in a dynamic global market.
