The year in commodities: shiny metals, steady crude and a tale of two gas markets

Commodities had a good year in 2025. Despite the steady slide in oil, the broad asset class that includes everything from gold to grain and crude to copper overcame tariffs and wars to end more than 15 per cent up in the Bloomberg Commodity Index. One month in, and this year has already delivered plenty of news flow: metals should stay shiny, crude sludgy, while natural gas diverges.

In January, precious metals rode an exhilarating (or terrifying) rollercoaster, depending on your perspective ¬– the wildest month since the early 1980s. Having raced up since August, gold prices gained 25 per cent during the month, and silver 63 per cent, before crashing on the final trading day as Chinese speculators bolted out. Silver saw its biggest-ever one-day drop, while gold lost 9 per cent. However, both metals are still well up on last year.

Looking ahead at metals

Gold has benefitted from diversification of reserves by central bankers worried about the reliability of the US dollar, hedging against geopolitical uncertainty, the weaker dollar, and expectations of lower US interest rates. The yellow metal has already surpassed bankers’ year-end forecasts of $5000 per ounce.

Mined gold production has been stable at about 3,500 tonnes per year since 2018, with only a mild uptick in 2025 despite the higher prices. Given the time taken to develop new mines and the depletion of older resources in South Africa, output is likely to grow only moderately this year and then plateau.

Silver even outperformed gold last year, driving the silver:gold price ratio to as low as 44 in late January, from more typical levels of about 70. The January-end dip restored the ratio to just over 60. Silver has benefitted from both its safe-haven status and its industrial uses, especially in data centres, solar panels, and electric vehicles. But its price appreciation has driven searches for alternatives and “thrifting” of solar consumption, as well as diminishing its attractiveness in jewellery. Total silver demand fell about 4 per cent last year.

Still, the market has been in deficit for five consecutive years, explaining the price gains. Around $80 per ounce at the time of writing, silver prices also exceed analysts’ full-year target. Again, mine production is likely to be flattish. Restrictions on exports from China, the world’s second-largest producer, and possibly the US, could also support prices.

Copper is a more straightforward industrial story, with its use in electric wiring boosted by renewable energy systems, batteries, and AI centres. The red metal also appreciated strongly last year, though not to the levels of its precious cousins, gaining about 50 per cent since last January. The market is in structural deficit, with mines suffering from lower grades and technical and operational issues at sites in Indonesia and South America. The Glencore-Rio Tinto megamerger, called off last week, was driven by Rio’s desire to become the world’s top copper miner.

Upward revisions signal steady growth

Turning to oil, demand estimates are gradually creeping up. The International Energy Agency has slightly revised down its surplus estimates, but still sees 3.84 million barrels per day of excess supply this year. It is hard to believe the glut could be worse than 2020, when much of the world’s population were locked in their bedrooms. Goldman Sachs sees a perhaps more reasonable 2 million bpd. China can certainly keep soaking up bargain-basement barrels into its inventories, and it has new storage capacity under construction. That will help avoid oversupply, as happened last year, but will also cap any sharp price rises.

As expected, OPEC+ has kept production ceilings steady for the first quarter of 2026. If increases come later this year, the impact will be progressively less as more countries hit their practical capacity limits. In fact, production from February to June should drop slightly if Iraq and the UAE stick to their plans to compensate for past over-production (assuming that Kazakhstan, with much larger compensation obligations, doesn’t comply at all). Winter storms in the US and fires at fields in Kazakhstan temporarily curbed supply in January.

Then there are the usual geopolitical hotspots: Ukraine’s attacks on Russia’s refineries, oil terminals and tankers are becoming increasingly ambitious. So far, this has tightened refined product markets much more than crude. A resumption of the anti-government protests in Iran that were crushed in January, and renewed hostilities with Israel or the US, could threaten its oil exports.  However, the 12-day war in June 2025 caused no significant disruption.

Conversely, efforts at diplomacy should be regarded sceptically, and with fears of another American bluff. However, détente with Tehran and the relaxation of sanctions could add some 300-500,000 bpd of exports over a few months. After Houthi forces in Yemen paused attacks, marine traffic through the southern Red Sea appears poised to resume cautiously, cutting shipping distances and fuel consumption and reversing the build-up of oil on water.

And the US’s attempts to impose its will on Venezuela following the abduction of Nicolás Maduro could prolong a loss of about 500,000 bpd of exports. But it’s more likely that the new government under President Delcy Rodríguez will reach terms with Washington, bringing sales back to about 950,000 bpd, with the potential to grow throughout the year as sanctions are suspended and international services and investment return gradually.

Diverging paths for gas markets

Natural gas is a tale of two markets. US Henry Hub prices have been gaining steadily since early 2024 and spiked significantly during the cold winter weather in December and January. As LNG exports and the gas-fuelled data centre buildout gather momentum, and the White House frowns on renewables, Henry Hub should see consistent upward pressure.

Currently around $11 per MMBtu, Europe’s TTF gas price is much higher than Henry Hub’s $3.14. But, despite low storage levels, the continent came through a cold winter without a major price spike. Qatar has pushed back the start of its mega-LNG expansion to the end of this year. But the swelling tide of US, Qatari, Canadian, Emirati and other LNG should push prices much lower from this year onwards. Probably not this year, but possibly in 2027 or 2028, an LNG glut and lower spot prices combined with higher Henry Hub prices may make US exports unprofitable. This could be worsened were peace to break out in Ukraine and Europe, leading to the return of some Russian pipeline supplies.

Geopolitics hovers over both precious metals and energy, but more indirectly for silver and gold than for crude and gas. The metals story has structural strength on both supply and demand fronts. For oil – always excluding supply shocks – 2026 may be as bad as it gets. For global gas, this year is probably the best it will be for years to come.

•  Robin M. Mills is CEO of Qamar Energy and author of The Myth of the Oil Crisis