Commodity Market Outlook: Gold and Gas Prices Set to Rally in 2025
As the global economy slows down and the US dollar strengthens, commodity prices are expected to decline in 2025. However, gold and gas prices are poised to buck this trend and rally this year, according to industry experts.
Gold Prices to Shine
Gold prices reached all-time highs in 2024 and are expected to continue their upward trend in 2025. Investors are optimistic about gold due to its role as a hedge against risk, particularly in the face of geopolitical uncertainty and government debt. BullionVault and JPMorgan analysts predict gold prices to rise to $3,000 per ounce in 2025.
Gas Prices to Soar
Global natural gas prices have rallied since mid-December 2024, driven by cold weather and geopolitics. The recent halt of Russian gas flow to several European nations has introduced greater uncertainty to the global gas markets, and prices are likely to remain elevated as long as the cutoff remains in place. BMI forecasts gas prices to rise by about 40% in 2025 to $3.4 per million British thermal units (MMbtu).
Oil Prices Under Pressure
Crude oil prices were dragged down by weak Chinese demand and a supply glut in 2024, and market watchers expect prices to remain pressured in 2025. The International Energy Agency forecasts global oil demand to grow under a million barrels per day, and BMI predicts a supply glut in the first half of 2025.
Silver and Platinum to Follow Gold’s Lead
Silver, often referred to as gold’s poorer cousin, could also see prices rise in 2025, driven by demand for solar power and limited supply. JPMorgan analysts predict silver prices to rise, especially if U.S. policies become “more disruptive” in the form of increased tariffs and elevated trade tensions.
Copper and Iron Ore Prices to Decline
Prices of copper, key to the manufacturing of electric vehicles and power grids, may see a dent in 2025 due to a potential deceleration in energy transition amid policy shifts. Iron ore prices are also expected to slide on the back of an oversupply resulting from Chinese policies and geopolitics.
Soft Commodities to Taper Off
Cocoa and coffee prices, which scaled record highs in 2024, may taper off in 2025 as production expands and demand contracts. Rabobank researchers predict that these commodities will trade at levels well above cost of production, leading to increased production and decreased demand.
Overall, the commodity market outlook for 2025 is mixed, with gold and gas prices expected to rally, while oil, copper, and iron ore prices are under pressure.
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