Despite challenges for several commodities in 2025, this metal's impressive rally is expected to persist.

• While most global commodity prices are predicted to decline in 2025, gold and gas are anticipated to increase in price, according to industry experts.
• Commodities demand in China's second-largest economy may be boosted by further stimulus, which market participants will closely monitor.

According to industry experts, gold and gas prices are expected to rise in 2025, while global commodity prices are predicted to decline due to a slow global economy and a strengthening dollar.

Gold attracted investors seeking inflation protection, while iron ore prices declined due to China's sluggish growth, and this trend is expected to continue in 2025.

In 2025, commodities will face pressure across the board, according to BMI's head of commodities analysis Sabrin Chowdhury, who stated that the strength of the U.S. dollar will limit demand for commodities priced in that currency.

The world's second-largest economy, China, will be closely monitored by market participants for any additional stimulus measures, which may potentially revive global commodities demand.

Oil prices to slip

In 2025, crude oil prices are predicted to remain under pressure due to weak Chinese demand and a supply surplus.

In November, the International Energy Agency predicted a bearish oil market outlook for 2025, anticipating global oil demand to increase by only a million barrels per day, in contrast to the two million barrel per day growth forecasted for 2023.

Expectations of increased oil supply from non-OPEC+ countries will lead to a fall in Brent oil prices to $70 per barrel this year, despite global oil consumption rising.

The first half of 2025 is expected to witness a supply glut due to substantial new production from the US, Canada, Guyana, and Brazil, according to BMI. Additionally, if OPEC+ decides to roll back voluntary cuts, the oversupply will further strain prices.

The demand for oil and gas in 2025 is uncertain due to stable economic growth, rising fuel demand, and trade war impacts, inflation, and contracting demand in developed markets.

Brent crude was trading at $76.34 per barrel, similar to its price a year ago in early January.

Gas set to rise

Since mid-December 2024, global natural gas prices have increased due to cold weather and geopolitical factors, according to Citi analysts.

The halt of Russian gas flow to several European nations on New Year's Day has increased uncertainty in global gas markets, and gas prices are likely to remain high as long as the cutoff continues.

The prediction by Citi is that the colder weather in the U.S. and Asia for the rest of winter could lead to sustained high prices.

The cost of gas is predicted to increase by approximately 40% in 2025 to $3.4 per million British thermal units (MMbtu) from an average of $2.4 per MMbtu in 2024 due to rising demand from the LNG sector and increased net pipeline exports.

BMI analysts predict that LNG will continue to drive new consumption, backed by increasing export capacity and robust demand in Europe and Asia.

Gold may add sheen

In 2025, the run of gold price all-time highs could continue.

If U.S. policies become more disruptive, including increased tariffs, elevated trade tensions, and higher risks to economic growth, JPMorgan analysts predict that gold prices will rise, especially as they anticipate a similar trend.

In 2024, gold achieved its best annual performance in over a decade, with bullion prices rising about 26%, according to FactSet data. This increase was driven by both central bank and retail investor purchases.

In 2025, it is predicted by BullionVault and JPMorgan that the price of gold will reach $3,000 per ounce.

Silver and platinum likely to advance

Silver, which is gold's poorer cousin, may also experience price increases due to the continued demand for solar power, as it is used in building solar panels, and its supply remains limited.

JPMorgan analysts believe that silver and platinum have weak underlying fundamentals, but a catch-up trade later in 2025, when base metals stabilize, could be powerful.

Juerg Kiener, CIO of Swiss Asia Capital, stated that silver is commonly used in industrial applications, such as automobiles, solar panels, jewelry, and electronics. Additionally, it is necessary for the production of artificial intelligence products and has military applications.

Copper faces demand worries

The global energy transition may cause a decline in the prices of copper, which is crucial for the production of electric vehicles and power grids.

The 'green sentiment' that boosted prices in 2024 may be dampened to some extent if there is a potential deceleration in energy transition due to Trump's policy shifts, according to BMI in a note.

John Gross, president of John Gross and Company, stated that copper prices reached a record high in May 2024 due to a tight market, but they decreased for the rest of the year and will continue to do so, according to CNBC.

The metals market veteran stated that a combination of high inflation, increased interest rates, and a stronger dollar will negatively impact all metal markets.

Iron ore forecast to drop

An oversupply due to Chinese policies and geopolitics may cause iron ore prices to decline.

According to Goldman Sachs, the predicted U.S. tariffs on China, altered Chinese stimulus, and new low-cost supply will cause the market to enter a surplus, leading to a decline in gold prices to $95 per ton by 2025.

Despite the likelihood of China importing a record amount of iron ore this year, according to Reuters, iron ore prices dropped by over 24%, as per data from FactSet.

Cocoa and coffee

In 2024, cocoa and coffee prices reached record highs among soft commodities due to unfavorable weather conditions and supply constraints in major production areas. However, demand for these commodities may decrease in 2025.

If the cost of production is lower than the current trading levels of these commodities, we anticipate a decrease in demand and an increase in production in the upcoming year, according to Rabobank researchers.