What's going on with commodities?

Even if you don’t tend to pay close attention to commodities, you’ve almost certainly spotted them in the news these past few weeks.

That’s because there’s perhaps no asset more directly tied with conflict in the Middle East than oil, and its price has been zig-zagging ever since Iran and Israel started exchanging missiles. In addition to upheaval on the other side of the globe, the decision by OPEC+ to maintain production rates, at the same time that demand has waned in markets like China, has pushed oil 5.90% lower this year.

Oil's not the only commodity that has had a tumultuous 2025. Trade war tensions, increasingly volatile weather patterns, and the continued buildout of AI technology have all contributed to a wild year for every commodity under the sun.

On the whole, commodity prices are expected to decrease 12% in 2025, and an additional 5% in 2026, according to the World Bank Group.

Metallic madness

When discussing commodities, we can’t forget about gold. The hot commodity has soared 28.31% this year so far and hit over 24 record highs—even after booming 33% in 2024.

The safe haven investment tends to rise during instances of geopolitical instability, which is something we’ve had plenty of this year. Purchases from central banks around the globe have poured fuel on the fire, and their demand has only been accelerating in recent years.

But gold certainly isn’t the only precious metal that’s been shining in 2025.

Silver has climbed 27.31%, copper has jumped 27.03%, and palladium has roared 27.94% higher this year. Unlike gold, these metals are not primarily held as safe haven assets, and their price is heavily driven by industrial demand. All three are used for vital technologies such as semiconductors and electric vehicles—two huge areas of demand.

Don’t forget about agricultural commodities. “Markets for several commodities—for example coffee, cocoa, and natural gas—have been buffeted by supply shortfalls or demand surges linked to extreme weather,” explained the World Bank’s latest commodity report.

Talk about hot commodities.—LB