Several commodities face headwinds in 2025 — but this metal’s record rally is set to continue

Commodity prices are largely expected to fall in 2025 due to a sluggish extensive economic outlook and a resurgent dollar, but gold and gas prices are poised to rally this year, according to industry pros.

Commodities had a mixed 2024: While investors flocked to gold to hedge against inflation, commodities such as iron ore prostrate as the world’s largest consumer of metals, China, struggled with tepid growth. The story this year is undoubtedly to be the same.

“Commodities in general will be under pressure across the board in 2025,” said research firm BMI’s intellect of commodities analysis Sabrin Chowdhury, adding that the strength of the U.S. dollar will cap demand for commodities priced in the greenback. 

Bazaar participants will be keeping an eye on further China stimulus in hopes that it may fuel a recovery in commodities demand in the fantastic’s second-largest economy. 

Crude oil prices last year were dragged down by weak Chinese want and a supply glut, and market watchers expect prices to remain pressured in 2025.

The International Energy Agency in November whoop it up a bearish oil market picture for 2025, forecasting global oil demand to grow under a million barrels per day. This make an analogy withs to a two million barrel per day increase in 2023.

Commonwealth Bank of Australia sees Brent oil prices falling to $70 per barrel this year on guesses increased oil supply from non‑OPEC+ countries that’ll eclipse the rise in global oil consumption.

BMI said in its December note that the first half of 2025 was likely to see a quantity glut as substantial new production from U.S., Canada, Guyana and Brazil comes online. Also, if OPEC+ plans to pour in back voluntary cuts materialize, the oversupply will further pressure prices.

BMI noted that the demand impression in 2025 was not clear yet. “Global oil and gas demand remains uncertain, with stable economic growth and rising fuel call for offset by trade war impacts, inflation and contracting demand in developed markets.”

Global crude benchmark Brent was newest trading at $76.34 per barrel, around the same levels as it was a year ago in early January.

Gas set to rise

Global natural gas prices clothed rallied since mid-December 2024, driven by cold weather and geopolitics, Citi analysts said.

Ukraine’s late-model halt of Russian gas flow to several European nations on New Year’s Day has introduced greater uncertainty to the global gas markets. As hanker as the cutoff remains in place, gas prices are likely to remain elevated.

Colder weather for the rest of winter in the U.S. and Asia could also mask prices elevated, said Citi.

BMI forecasts gas prices to rise by about 40% in 2025 to $3.4 per million British thermal entities (MMbtu) compared to an average of $2.4 per MMbtu in 2024, driven by growing demand from the LNG sector and higher net in the offing exports. 

U.S. Henry Hub natural gas prices, which was the gauge that BMI referred to, are currently trading at $2.95 per MMbtu.

“LNG transfer continue to drive new consumption, supported by rising export capacity and strong demand in Europe and Asia,” BMI analysts noted. 

Gold may add sheen

Gold prices notched a slew of all-time highs last year, and the run of fresh records could continue in 2025.

“Investors are optimistic about gold and silver for 2025 because they are so pessimistic on geopolitics and government debt,” replied Adrian Ash, director of research at BullionVault, a gold investment services firm, emphasizing on the yellow metal’s role as a hedge against imperil. 

JPMorgan analysts also wait for gold prices to rise, especially if U.S. policies become “more disruptive” in the form of increased tariffs, elevated custom tensions and higher risks to economic growth.  

Gold notched its best annual performance in over a decade last year. Bullion cost outs rose about 26% in 2024, data from FactSet showed, driven by central bank as well as retail investor acquires.

BullionVault and JPMorgan expect gold prices to go up to $3,000 per ounce in 2025.

Silver and platinum likely to advance

Gold’s lousier cousin, silver, could also see prices rise, especially as demand for solar power — silver is used in construction solar panels — remains resilient and the metal’s supply stays limited.

“Both silver and platinum have pronounced underlying deficit fundamentals, and we think a catch up trade later in 2025, once base metals find firmer rank, could be quite potent,” JPMorgan analysts noted. 

Mellifluous is primarily utilized in industrial applications and is frequently incorporated in the production of automobiles, solar panels, jewelry and electronics. It is also have need of in building artificial intelligence products and has military applications as well, said CIO of Swiss Asia Capital’s CIO Juerg Kiener.

That whispered, silver’s upside will be dependent on global industrial demand which will be impacted by Trump’s tariffs, dear metals trading services group MKS Pamp wrote in an outlook report.

Copper faces demand worries

Consequences of copper, which is key to the manufacturing of electric vehicles and power grids, may see a dent after shooting to a record high this year on the in arrears of a global energy transition.

“A potential deceleration in energy transition amid Trump’s policy shifts might subdue, to some extent, the ‘green sentiment’ that bolstered prices in 2024,” BMI wrote in a note.

While copper rewards rose to a record high in May 2024 largely as a result of a squeezed market, they trended lower for the rest of the year, and wishes continue to do so, John Gross, president at the eponymous metals management consultancy John Gross and Company, told CNBC.

A cocktail mix of excited inflation, elevated interest rates and a stronger dollar will weigh on all metals markets, the metals market old-timer said.

Iron ore forecast to drop

Iron ore prices may also slide on the back of an oversupply resulting from Chinese approaches and geopolitics. 

“The expected U.S. tariffs on China, changing nature of Chinese stimulus and new low-cost supply [will] push the merchandise into further surplus,” Goldman Sachs said, forecasting prices to decline to $95 per ton in 2025.

This despite China likely to signify record amount of iron ore this year, according to Reuters. Iron ore prices fell over 24%, conforming to data from FactSet.

Cocoa and coffee

Cocoa and coffee prices stand out amongst the soft commodities basket, be subjected to scaled record highs in 2024 fueled by adverse weather conditions and supply tightness in key producing regions. But want may taper in 2025.

“Given that these commodities are trading at levels well above cost of production, we expect putting out to expand and demand to contract in the coming year,” Rabobank researchers said.