Gold is preparing to set new records and gas prices are rising

Global commodity prices are largely expected to decline in 2025 due to a slowing global economic outlook and a rebounding dollar, but gold and gas prices are poised to rise this year, according to industry experts.

Commodities performance was mixed in 2024: While investors flocked to gold as a hedge against inflation, commodities such as iron ore fell as China, the world's largest consumer of the metal, suffered tepid growth. This year the story is likely to be the same.

“Commodities in general will be under pressure across the board in 2025,” said Sabreen Chaudhry, head of commodity analysis at BMI Research, adding that the strength of the US dollar will limit demand for goods priced in the US currency.

Market participants will be watching further Chinese stimulus in the hope that this will boost a recovery in commodity demand in the world's second-largest economy.

Crude oil prices fell last year Weak Chinese demand There is a glut in supply, and market observers expect prices to remain depressed in 2025.

International Energy Agency in November Painting a bearish picture for the oil market for 2025He expected global oil demand to grow by less than one million barrels per day. This compares to an increase of 2 million barrels per day in 2023.

The Commonwealth Bank of Australia expects Brent crude prices to fall to $70 a barrel this year amid expectations that increased oil supplies from non-OPEC+ countries will outpace rising global oil consumption.

BMI said in its December note that the first half of 2025 is likely to see a supply glut with the start of significant new production from the United States, Canada, Guyana and Brazil. Also, if OPEC+ plans to taper voluntary cuts come true, excess supply will put further pressure on prices.

The BMI index indicated that the demand picture in 2025 was not yet clear. “Global oil and gas demand remains uncertain, with stable economic growth and rising fuel demand offset by the effects of the trade war, inflation and contraction in developed market demand.”

Brent crude oil, the global benchmark It last traded at $76.34 a barrel, roughly the same levels as a year ago in early January.

Gas is set to rise

Global natural gas prices have risen since mid-December 2024, driven by cold weather and geopolitical conditions, Citi analysts said.

Ukraine recently stopped the flow of Russian gas This has led to several European countries on New Year's Day increasing uncertainty in global gas markets. As long as the reduction remains in place, gas prices are likely to remain high.

Cold weather for the rest of the winter in the United States and Asia could also push prices higher, Citi said.

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

Henry Hub US natural gas prices, which were the measure indicated by the BMI, are currently trading at $2.95 per million British thermal units.

“LNG will continue to drive new consumption, supported by increased export capacity and strong demand in Europe and Asia,” BMI analysts wrote.

Gold may add shine

Gold prices hit a slew of all-time highs last year, and the streak of new records could be extended in 2025.

“Investors are bullish on gold and silver for 2025 because they are very pessimistic on geopolitics and government debt,” said Adrian Ash, research director at BullionVault, a gold investment services company, emphasizing the role of the yellow metal as a hedge against risks.

JPMorgan analysts also expect gold prices to rise, especially if US policies become “more disruptive” in the form of increased tariffs, increased trade tensions and increased risks to economic growth.

gold He achieved her Best annual performance In more than a decade last year. Data from FactSet showed that bullion prices rose by about 26% in 2024, driven by the rise The central bank as well as purchases by individual investors.

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

Silver and platinum are likely to advance

Silver, gold's poorer cousin, could see prices rise, especially as demand for solar energy – 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 the catch-up trade later in 2025, once the base metals find a firmer footing, could be very strong.“,” JP Morgan analysts noted.

Silver is primarily used in industrial applications and is frequently incorporated into the production of automobiles, solar panels, jewelry, and electronics. It is also needed in building artificial intelligence products and has military applications as well, said Jörg Keener, IT director at Swiss Asia Capital.

However, silver's upside will depend on global industrial demand being affected by Trump's tariffs, precious metals trading services group MKS Pamp wrote in a forecast report.

Copper faces demand concerns

Copper prices, a key ingredient in electric vehicle manufacturing and power grids, may decline next Shooting is at a record high this year Against the backdrop of the global energy transition.

“A potential slowdown in the energy transition amid Trump’s policy shifts may, to some extent, dampen the ‘green sentiment’ that has boosted prices in 2024,” BMI wrote in a note.

While copper prices rose to a record high in May 2024 largely as a result of market pressure, they have trended lower for the rest of the year, and will continue to do so, says John Gross, president of John Gross, the metals management consultancy of the same name. The company told CNBC.

The veteran metals market expert said that a combination of high inflation, high interest rates and a strong dollar will affect all metals markets.

Expectations of a decline in iron ore

Iron ore prices may also decline on the back of oversupply resulting from Chinese policies and geopolitics.

“Expected US tariffs on China, the changing nature of Chinese stimulus and new low-cost supplies (will push) the market further into surplus,” Goldman Sachs said, forecasting prices to fall to $95 per ton in 2025.

This is despite the possibility of importing from China Record amount of iron ore this yearAccording to Reuters. Iron ore prices fell more than 24%, according to data from FactSet.

Cocoa and coffee

Cocoa and Coffee prices It stands out among the basket of soft goods, after hitting record levels in 2024 fueled by adverse weather conditions and supply shortages in key production areas. But demand may diminish in 2025.

“Given that these commodities are trading at levels well above their cost of production, we expect production to expand and demand to contract next year.” Researchers at Rabobank said.