By admin 
Analysts and economists predict that the global economy may remain on a fragile recovery trajectory into 2025, with the path to growth remaining fraught with uncertainty. U.S. domestic and foreign policies, geopolitical tensions, and the escalation of trade barriers could be a new source of volatility for the commodities market, continuing its 2024 pattern of divergence.
In its 2025 Commodity Outlook report released in December, Morgan Stanley noted that it continues to be bullish on gold, and industrial metals given market supply and demand, and shifted its stance on oil from neutral to bearish. Analysts expect commodity prices to stabilize in 2025, as further increases in metals and agricultural prices will balance the decline in energy prices.
Morgan Stanley also believes the rally in precious metals to continue next year, with a third consecutive year of bullishness on gold and stronger gains expected for silver and platinum.
To summarize a few keywords that will influence the trend of the commodity market in 2025, Trump, China’s economy and OPEC are mentioned the most.
Trump
An ideal state would be Trump’s tariff threats to be enough to force concessions from major trading partners and end up with only a few minor trade barriers. Then, the U.S. remains the global economic leader.
As inflation eases and monetary policy loosens, commodity prices will be pushed higher. The exception, however, is the crude oil market, which is struggling due to oversupply, especially if U.S. producers dramatically increase production as Trump has demanded.
Second, if Trump helps broker a ceasefire in Ukraine and the Middle East, this would be favorable for commodities such as copper, which are subject to global economic growth, but could be negative for crude oil and natural gas if Russian supplies return to the market.
By contrast, if Trump takes office and erects massive trade barriers and withdraws from or undermines international agreements and treaties, including the Paris Climate Accord and the North Atlantic Treaty Organization. The global economy is expected to suffer as countries rearrange trade flows and supply chains. Global inflation is likely to rise and many major economies may tighten monetary policy as a result.
The result will be that commodities such as copper and iron ore, which are subject to global economic growth, will weaken, as will crude oil and liquefied natural gas due to weak demand. After Trump announced he had won the election, the London copper contract fell 7.7% in the following week. Meanwhile, the U.S. stock market could eventually turn bearish if Wall Street realizes that the benefits of domestic tax cuts won’t be able to offset the economic losses from tariffs.
China
Many Western analysts see 2024 as the year the Chinese government cleans up its economic problems, such as the poor financial condition of housing developers and local governments. And these efforts could bear fruit in 2025, allowing the Chinese government to focus more on boosting consumer sentiment and confidence.
A détente between China and the new Trump administration could lead to more constructive engagement with Europe and better partnerships with the Global South countries, looking for new markets to capitalize on its leadership in energy transition technologies and products.
A reinvigorated China would be good for commodities such as copper, iron ore, liquefied natural gas and coal, but probably not so much for crude oil, given China’s rapid shift to electric vehicles.
OPEC
OPEC and its allies, known as OPEC+, have been a key influence on the crude oil market in recent years. Over the past two years, OPEC+ has kept crude prices around $75 per barrel by cutting production. However, continued weak demand and the new Trump administration’s goal of further increasing U.S. production could put more pressure on unity within OPEC.
Some members, such as the United Arab Emirates, may argue that it would be better to monetize oil reserves sooner rather than later. Some OPEC members are already convinced that the China-led electric vehicle transition will be the biggest force disrupting the global energy market.
Analysts believe the energy transition could accelerate given the Trump administration’s potential tariff policy, against a backdrop of cost-competitive Chinese goods, and the willingness of buyers outside the U.S. to forgo expensive fossil fuels, which would positively impact copper, lithium and many smaller metals. Silver may also benefit as it can be used to manufacture solar panels.