While cryptocurrency, stocks, and bonds often dominate headlines, a quieter opportunity is emerging in the commodities market.
Commodities may be understated, but these oft-forgotten assets have quietly become some of the best performers of the year. And pros say they could be particularly smart picks going forward, especially if Trump’s tariffs trigger another wave of inflation.
The Hot Commodities
A Golden Year for Gold
2024 has been gold’s golden era: The shiny metal is up 27% year-to-date, outpacing even the robust 25% gain of the S&P 500. Often regarded as a safe haven during times of uncertainty, gold’s performance has been buoyed by ongoing geopolitical tensions and inflation concerns.
Cam Hui, an investment analyst, recently wrote a bullish take on gold in MarketWatch, suggesting that it remains an appealing choice for 2025. He highlighted its resilience and potential to outperform traditional equities, positioning it as a cornerstone for wealth in an unpredictable market environment.
Copper: The Metal for the Future?
Morgan Stanley’s 2025 Global Strategy Outlook takes a different stance, naming copper as its top commodity pick for the upcoming year. In the firm’s recent 2025 Global Strategy Outlook, strategist Serena Tang emphasized copper’s critical role in renewable energy technologies and AI hardware, industries poised for growth as global economies pivot toward sustainability and technological innovation.
“Copper is our top pick due to demand recovering with lower prices,” Tang wrote.
Copper is only up about 8% this year so far, making it an attractive bargain when compared to gold’s gains. As prices stabilize and demand picks up, copper could deliver substantial upside.
Silver’s Shine
Silver, often overshadowed by gold, has also gained attention as a dual-purpose metal with roles in both industrial applications and investment portfolios. From AI hardware to solar panels, silver’s demand continues, and some economists suggest a positive trajectory for 2025.
The Promise of Agriculture
Beyond metals, agricultural commodities such as corn and wheat may also have room to run next year. Both have seen prices dip to multi-year lows, yet rising global demand could drive a rebound next year. Wheat, in particular, is positioned for growth as supply chain distributions and climate challenges impact production in key regions.
The Energy Market Conundrum
On the other hand, oil futures are in the red this year, largely due to slowing demand for energy in China. Some analysts say that the downturn could continue.
Morgan Stanley equity analyst Daniel Katz wrote in a note yesterday: “Our oil strategist continues to argue that the oil market appears to be heading for a sizeable surplus in 2025, driven by a combination of (1) decelerating oil demand growth, (2) still-robust non-OPEC supply growth, and (3) OPEC’s ambition to start growing supply as well.”
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Bautis Financial LLC is a registered investment advisor. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial advisor and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.