Commodity Insights

Commodity Market Wrap

Gold and silver are set to conclude 2025 with standout gains, while crude oil is ending the year sharply lower after losses exceeding 20%, highlighting a clear divergence across commodity classes.

Gold prices are trading near $4,330 per ounce, closing out a landmark year marked by the strongest annual performance in over four decades. Bullion surged nearly 66% during the year, with momentum accelerating after April’s tariff announcements. The rally remained well supported by persistent geopolitical uncertainty, expectations of easing US monetary policy, sustained central bank buying and steady ETF inflows. While prices cooled into year-end amid profit-taking and elevated volatility, the broader macro backdrop continues to remain supportive.

The US Federal Reserve’s latest meeting minutes reinforced the possibility of further rate cuts if inflation continues to moderate, while unresolved geopolitical flashpoints continue to underpin safe-haven demand. Although tighter margin requirements could limit speculative activity in the near term, gold enters 2026 with a structurally firm bias, despite risks of short-term consolidation.

Crude oil prices remained rangebound into the final trading sessions of 2025, with WTI hovering near $58 per barrel, but the broader trend reflects a challenging year for oil markets. Prices are on track for their steepest annual decline since 2020, weighed down by persistent supply surplus concerns as global production outpaced demand growth. Rising US crude inventories, highlighted by a sizable weekly build reported by the API, reinforced the bearish tone. While geopolitical risks offered intermittent support, expectations of higher output from OPEC+ and non-OPEC producers continued to dominate sentiment. As markets move into 2026, focus will remain on OPEC+ policy decisions and inventory trends, with surplus pressures likely to cap upside despite geopolitical tailwinds.

Base metals traded on a softer note in the final session of the year, with copper leading losses and slipping over 1% to around $12,400 per tonne amid year-end profit booking. Despite the pullback, copper is poised to record its strongest annual gain since 2009, rising over 40% on the LME, supported by supply disruptions and structurally strong demand linked to electrification, AI infrastructure and data-centre expansion. Temporary mine outages, including disruptions at the Grasberg mine, tightened supply through the year, while accelerated shipments to the US ahead of potential tariffs squeezed availability elsewhere. Additionally, China’s reaffirmation of its near 5% growth target and improving manufacturing indicators continue to support the medium-term demand outlook, keeping the broader bias constructive despite near-term consolidation.

Natural gas prices softened as warmer weather forecasts triggered long liquidation, with prices retreating after early gains. Updated forecasts indicate milder temperatures across much of the central and eastern US in early January, reducing heating demand at a time when supply remains abundant. US production continues to hover near record highs, reinforcing the bearish backdrop, even as recent storage draws provided limited support. The US Energy Information Administration’s upward revision to its 2025 output forecast further underscores expectations of sustained supply strength. In Europe, gas prices remain rangebound near €28/MWh, heading for a sharp annual decline as steady Norwegian flows and increased LNG imports offset winter demand. Overall, while weather-driven volatility persists, comfortable supply conditions are likely to cap upside into early 2026.