yolowire.com - Commodities analysts generally expect prices to fall in 2025 due to a sluggish global economic outlook and a resurgent U.S.
However, precious metals such as gold and natural gas prices are poised to rally in the year ahead, according to industry experts.
Commodities saw mixed results in 2024: While gold and cocoa prices hit record highs, crude oil and iron ore fell as the world’s largest consumer, China, struggled with weak economic growth.
For the year ahead, China is likely to continue having an outsized impact on commodity prices, as is geopolitical instability and the new administration of U.S. president-elect Donald Trump.
Here is the outlook for several commodities in 2025.
Oil and Natural Gas
Crude oil prices were dragged lower in 2024 by weak Chinese demand and a supply glut, and market watchers expect much of the same in 2025.
The International Energy Agency (IEA) has forecast a bearish oil market this year, with global oil demand growing under a million barrels per day. That compares to a two million barrel per day increase in 2023.
However, natural gas prices have rallied since December, driven by cold weather and geopolitics, and that trend is likely to continue in coming months, according to Citigroup (NYSE:C).
Ukraine’s recent halt of Russian gas flow to several European nations has introduced greater uncertainty to the global gas markets, pushing prices higher.
Some analysts are forecasting that natural gas prices could rise 40% this year to $3.40 U.S. per million British thermal units (MMbtu).
Gold Bullion
Gold’s price hit multiple all-time highs last year, and the run of records could continue in 2025, according to analysts.
JPMorganChase (NYSE: JPM) expects gold prices to rise further this year, especially if U.S. policies become disruptive in the form of tariffs, elevated trade tensions, and economic uncertainty.
JPMorgan (NYSE:JPM) has forecast that gold’s price will reach $3,000 U.S. an ounce in 2025.
Silver and Platinum
In addition to Gold, silver could also see prices rise in the year ahead, especially as demand for solar power (silver is used in building solar panels) remains strong.
Silver, which is primarily used as an industrial metal, is dependent on global industrial demand which will be impacted by Trump’s tariffs. The same goes for platinum, say analysts.
Prices for Copper, which is a key component in electric vehicles and power grids, may see a decline in 2025 after hitting a record high in 2024 due to the global energy transition.
High inflation, elevated interest rates, and a stronger U.S. dollar are likely to weigh on all industrial metals in the year ahead, say analysts.
When it comes to iron ore prices, China remains the key factor. Demand for iron ore, the key ingredient in steel, is largely driven by Chinese construction demand.
With China’s property market in a prolonged slump, analysts at Goldman Sachs (NYSE:GS) are forecasting iron ore prices will decline to $95 U.S. per ton in 2025.
Cocoa and Coffee
Cocoa and coffee prices skyrocketed in 2024 due to supply constraints caused by poor crops. Each commodity achieved record highs last year due largely to adverse weather conditions.
However, looking ahead, demand for cocoa and coffee may decline in 2025 as producers and consumers are pushed away by high prices, say analysts.