Commodity prices are widely expected to fall in 2025 due to a sluggish global economic outlook and a resurgent dollar, but gold and gas prices are expected to rise this year, according to industry experts.

Commodities had a mixed 2024: While investors flocked to gold to hedge against inflation, commodities like iron ore fell as China, the world’s largest metals consumer, struggled with subdued growth. The story will probably be the same this year.

“Commodities in general will be under pressure across the board in 2025,” said Sabrin Chowdhury, head of commodity analysis at research firm BMI, adding that the strength of the U.S. dollar is driving demand for commodities priced in U.S. dollars , will limit.

Market participants will be keeping an eye on further stimulus measures in China, hoping they could spur a recovery in commodity demand in the world’s second-largest economy.

Crude oil prices were pushed down last year by weak Chinese demand and an oversupply, and market watchers expect prices to remain under pressure in 2025.

The International Energy Agency in November painted a pessimistic oil market picture for 2025, forecasting global oil demand to grow to below a million barrels per day. This compares to an increase of two million barrels per day in 2023.

The Commonwealth Bank of Australia expects Brent oil prices to fall to $70 a barrel this year on expectations that oil supply from non-OPEC+ countries will dwarf increases in global oil consumption .

BMI said in its December statement that there would likely be a supply glut in the first half of 2025 as significant new production comes online from the US, Canada, Guyana and Brazil. Even if OPEC+ plans to reverse voluntary cuts are implemented, oversupply will continue to put pressure on prices.

BMI noted that the demand picture in 2025 is not yet clear. “Global oil and gas demand remains uncertain as robust economic growth and increasing fuel demand are offset by the impact of the trade war, inflation and declining demand in developed markets.”

Global crude oil benchmark Brent was last trading at $76.34 a barrel, about the same level as a year ago in early January.

The gas will rise

According to Citi analysts, global natural gas prices have increased since mid-December 2024, driven by cold weather and geopolitics.

Ukraine’s recent halt in Russian gas supplies to several European countries on New Year’s Day has led to greater uncertainty in global gas markets. As long as the limit remains in effect, gas prices are likely to remain elevated.

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

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

U.S. Henry Hub natural gas prices, which BMI referenced, are currently $2.95 per MMbtu.

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

Gold can add shine

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

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

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 higher risks to economic growth.

Gold Last year achieved its best annual performance in over a decade. FactSet data showed precious metals prices rose about 26% in 2024, driven by purchases from central banks and retail investors.

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

Silver and platinum are likely to rise

Gold’s poorer cousin, silver, could also see its price rise, particularly as demand for solar energy – silver is used to build solar panels – remains stable and the supply of the metal remains limited.

“Both silver and platinum are in strong underlying deficit and we believe a catch-up trade later in 2025, once base metals find more stability, could be quite impactful.”,” JPMorgan analysts noted.

Silver is primarily used in industrial applications and is commonly used in the manufacture of automobiles, solar panels, jewelry, and electronics. It is also needed for building artificial intelligence products and also has military applications, said Jürg Kiener, CIO of Swiss Asia Capital.

However, silver’s upside will depend on global industrial demand impacted by Trump’s tariffs, precious metals trading services provider MKS Pamp wrote in a forecast report.

Copper faces demand concerns

Prices of copper, crucial to making electric vehicles and power grids, could see a decline after soaring to a record high this year amid a global energy transition.

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

While copper prices rose to a record high in May 2024 largely due to a tight market, they have been trending lower for the rest of the year and will continue to do so, John Gross, president of the eponymous metals management consultancy John Gross and Company, told CNBC.

A cocktail of high inflation, elevated interest rates and a stronger dollar will weigh on all metals markets, the metals market veteran said.

A decline in iron ore is forecast

Iron ore prices could also fall due to oversupply caused by Chinese politics and geopolitics.

“Expected U.S. tariffs on China, the changing nature of Chinese stimulus measures and new low-cost supply (will) drive the market into further surplus,” Goldman Sachs said, forecasting prices falling to $95 a ton in 2025.

This is despite China expected to import a record amount of iron ore this year, according to Reuters. Iron ore prices fell over 24%, according to data from FactSet.

Cocoa and coffee

Cocoa and coffee prices stand out among agricultural commodities as they reached record highs in 2024 due to adverse weather conditions and supply shortages in key production regions. But demand could slow in 2025.

“Given that these commodities are trading at levels well above production costs, we expect production to increase and demand to decline in the coming year,” Rabobank researchers said.