ING Group expects gold to perform well in 2025, amid rising tensions between the United States and China. The report indicates that these tensions will significantly impact energy and commodity markets, which could lead to sharp price fluctuations. In contrast, gold appears to benefit from these economic conditions.
Experts expect that President-elect Donald Trump’s threats to impose tariffs on trading partners will lead to a deterioration in economic relations between major countries. Other countries may respond with countermeasures, creating disruptions in many markets such as oil, metals and agricultural commodities. These trade escalations may prompt investors to seek a safe haven in gold.
On the other hand, markets are awaiting the impact of Chinese economic stimulus aimed at boosting domestic consumption. Analysts believe that these incentives may contribute to the growth of the Chinese economy, which will positively impact some commodities and markets. However, due to the uncertainty surrounding trade conflicts, gold remains the safest option.
Gold is an asset that is linked to multiple economic factors. In times of economic turmoil or political tensions, investors tend to invest in gold as a safe haven. This explains why experts are optimistic about gold’s performance in the coming year. Compared to other assets, such as oil and agricultural commodities, gold remains the most stable option in times of global crises. Based on the forecast, investors may see gold continuing to be the best option for preserving capital in 2025. In the current circumstances, with trade tensions increasing, the yellow metal is likely to see an increase in demand. With concerns about the global economy continuing, it seems that gold will remain the “only winner” in the coming year.
Commodities and Trade Tensions in 2025
Analysts Warren Patterson and Eva Manthey forecast in their report that prices for many commodities will face a decline in 2025. This is due to the relative balance between supply and demand in the markets. However, experts believe that escalating trade tensions may negatively impact the performance of commodities. Markets continue to monitor the impact of Chinese incentives on the commodities sector, as these incentives may contribute to additional volatility.
Although the policies of former US President Donald Trump are unlikely to significantly impact oil production in the United States, crude oil prices may come under pressure due to increased supplies from outside OPEC. The report expects the average price of Brent crude to decline to around $71 per barrel next year, compared to current prices of around $74. This expected decline reflects the impact of global factors on the oil market.
On the other hand, the analysts’ report reflects a growing trend in the natural gas industry. Expectations indicate that new LNG export terminals in the United States will boost domestic demand. This in turn will raise prices in the US market, in addition to supporting Europe’s ability to compensate for the shortage in Russian supplies. Assuming a mild winter in the European region, natural gas prices in the European market are expected to decline over the coming year.
As trade tensions prevail, markets continue to assess how these tensions will affect various markets. It is clear that instability in global trade could lead to significant volatility in commodity markets. Shifts in economic and customs policies could also reshape demand and supply trends for commodities. Based on these expectations, 2025 is likely to witness significant challenges for commodity markets, including oil and natural gas.
Gold: A Safe Haven in 2025
According to the report, gold will continue its strong performance witnessed by the markets in the current year, supported by geopolitical tensions. The average price of gold in 2025 is expected to range around $2,760 per ounce, compared to its current price of $2,713. Geopolitical concerns are among the main factors that push investors to take gold as a safe haven.
Expectations indicate that central banks will be the largest buyers of gold next year, as they aim to diversify their foreign reserves. These banks are expected to continue increasing their purchases of the yellow metal, especially in light of the global situation full of concerns. In addition, geopolitical and trade tensions may contribute to strengthening gold as a safe option for investors. These factors will remain pivotal in determining the demand for gold.
In contrast, the outlook for industrial metals does not look very encouraging. These metals are affected by several factors, such as trade tensions that may increase, as well as the expected changes in climate laws under the Biden administration. Moreover, the decline in Chinese demand reflects a clear threat to industrial metals markets. Experts expect the average copper price to decline to around $8,900 per ton in 2025, compared to its current price of over $9,200.
In the agricultural commodities sector, the report indicates that grains will be the most vulnerable to the effects of potential trade disputes. Trade tensions significantly affect agricultural commodity markets. In addition, weather conditions will remain a major factor affecting this sector. These fluctuations may lead to continued volatility in cocoa and coffee prices over the coming year.
In general, energy and commodities markets are heading towards facing significant challenges in the coming year. Escalating geopolitical and economic tensions will continue to significantly impact oil, gas and industrial metals markets.
