What is Going on With Commodities? A Look at Gold, Silver, Oil, Copper, Rare Earths, and LNG
We made it. Happy New Year’s Eve everyone! Wishing everyone a prosperous New Year.
The books are closing on 2025, and if you’ve been trading the commodity space this year, you’re likely either exhausted, up to your neck in profits, or a confusing mix of both.
Sitting here on New Year’s Eve, looking back at the charts, the narrative wasn’t the “recessionary collapse” many feared back in ‘24, nor was it an uniform boom. It was a year of divergence. We saw energy markets wrestling with a supply glut while rare and precious metals—specifically the ones powering our tech and grid—went absolutely parabolic.
Here is my personal deep dive into what just happened in the commodity space in 2025 and, more importantly, where I’m putting my money for 2026.
Oil Oversupply Or An Amazing Opportunity?
If you were long oil this year hoping for a geopolitical spike to save you, it was a frustrating trade. Despite the noise in the Middle East and tensions in the Caribbean, the story of 2025 was one of overwhelming supply.
In the meantime, oil demand is forecasted to fall according to sources like the U.S. Energy Information Administration (EIA):
We spent much of 2025 watching US shale defy gravity (again). Production held steady, and even with OPEC+ trying to manage the floor, the market felt heavy. We saw WTI struggle to hold the $70s and eventually drift lower into the $50s as the year ends. The “scarcity premium” just evaporated.
The 2026 forecast looks bearish from the major agencies tracking and forecasting oil demand and supply. The IEA and major banks are shouting about a “supply wave” hitting in 2026. They suggest that we are looking at a potential surplus of 3.84 million barrels per day (bpd) next year.
However, these low prices are not sustainable forever. Companies, organizations, and governments will choose to lower production and capital expenditures (capex) if prices keep falling and stay low.
Prominent analysts forecast Brent to average near $55/bbl in Q1 2026.
Oil is a long term play in my opinion. The world still needs oil and energy with some even saying that oil will partially power AI. With many other commodities exploding in price, it’s a matter of time once
A trade for 2026 is likely in refiners (who benefit from cheap crude input and higher refining margins) or just stepping aside.
The cure for low prices is low prices; we are already seeing many producers cut back capex spending on projects. If you are patient enough, this is setting up for a nice supply shock situation at some point in the future.
Unless we see a massive, unforeseen black swan event from a major player like Russia or Iran, the supply/demand dynamic still needs to be brought into balance.
Silver Was The “Rockstar” of 2025
I’ve been saying for years that Silver was undervalued, but 2025 was the year it finally woke up and chose to go to the moon:
Silver didn’t just rise; it exploded. We saw a move of nearly 150%, rallying from ~$30 to over $70/oz by December. This wasn’t a meme-stock rally; it was structural. The industrial burn rate—driven largely by the solar PV sector and electronics—finally broke the back of available inventory. We’ve been in a deficit for five years, and in 2025, the vaults finally looked empty.
The momentum is real looking to 2026. With the “Green & AI” trade overlapping, silver is the singular critical metal for both as it is widely used in so many different industrial uses.
$100 silver is no longer a crazy “tinfoil hat” prediction; it’s a legitimate technical target for 2026. Banks are upgrading targets to the $60–$80 range as a base case.
Watch out for a potential pullback if the Fed pauses rate cuts, but the industrial floor is rock solid.
Getting into silver now should be for long term investors only; traders may be burnt in very short time frames after such a run.
Gold As An Unstoppable Inflation Hedge
While Silver was the volatile rockstar, Gold was the adult in the room. It just kept grinding higher.
Gold pierced the $4,500/oz mark this year. The driver wasn’t just fear; it was the Central Bank Put. Nations (especially in the BRICS block - Brazil, Russia, India, China, South Africa) continued to aggressively swap US Treasuries for physical gold bars. The “de-dollarization” narrative moved from conspiracy theory to observable central bank policy.
I don’t see the gold trade stopping momentum, especially as there will be further rates cuts in the mix. J.P. Morgan and others are eyeing $5,000+ in 2026.
Sovereign debt fears, rate cuts, inflation, geopolitical tensions, and other factors will lead to gold going higher. With US debt interest spiraling, gold is being bid up as the only “neutral” reserve asset.
I would not sell gold here; long term investors will be rewarded for holding this metal that has been used as a currency and commodity for thousands of years in my opinion. This is a multi-year super-cycle.
The “Detachment” in the Liquified Natural Gas (LNG) trade
Natural Gas is usually a weather trade, but in 2025, it became an export capacity trade.
We saw a fascinating decoupling in 2025 with liquid natural gas. While global LNG prices softened due to a flood of supply from the US and Qatar (the “LNG Wave”), domestic US gas prices actually started to climb. Why? Because we are exporting so much of it that we’re tightening our own local market.
We are entering the “Golden Age of Gas” globally, but it’s going to be volatile.
Expect a possible glut globally and international prices might drop as new liquefaction trains in Qatar and the US come online.
Bullish on U.S. domestic gas prices. The EIA sees prices averaging over $4.00/MMBtu in 2026 because production growth (up only ~1%) can’t keep up with the insatiable demand from LNG export terminals.
Investors could go long U.S. liquid gas producers who have export exposure which can maximize their returns. Not financial advice.
The Red Metal Renaissance with Copper
If you missed the Copper trade in 2025, you missed the story of the decade: The AI Infrastructure Buildout.
Copper hit record highs this year, over $12500/tonne by year-end. The story shifted from “EVs need copper” to “Data Centers need copper.” AI data centers require massive power infrastructure, and you can’t build the grid without the red metal. Smelters were fighting for concentrate all year, pushing processing fees to record lows.
We are staring down the barrel of a structural deficit and that picture is likely going to get worse.
Analyst price targets of $12,500/tonne by Q2 2026 have already been achieved, so this will likely get re-rated higher.
Mines can take 10+ years to build. Data centers can take roughly 2 years. Do the math. There simply isn’t enough copper coming out of the ground to meet the 2026 and beyond demand schedule.
Every dip is a buy here just like the gold markets. This is the tightest market in the commodity complex and tightest market copper has seen in years.
Rare Earths: The Silent War
This sector is less about “markets” and more about “geopolitics.” The huge story this year has been how the U.S. tariffs caused China to “retaliate“ with rare earth export restrictions. These rare earths are so named because they are rare and needed in critical industries.
China tightened the screws on exports again in 2025, reminding the world they control the processing choke points. Prices for Neodymium (NdPr) and Dysprosium rose steadily (~10-16%) not just on EV demand, but on defense stockpiling.
The “China Plus One (C+1)” strategy is in full swing, but Western supply chains are still years away from maturity. The C+1 strategy involves using other countries besides just China in supply chains to make sure there are redundancies to prevent a chokepoint.
Expect continued price volatility driven by trade bans or tariffs rather than pure supply/demand.
Western miners outside of China (like MP Materials) are the only insurance policy the West has. These companies have already caught the U.S. governments attention and gone up due to government investments.
Final Thoughts for a Prosperous 2026
If 2025 taught us anything, it’s that commodities are no longer a monolithic asset class. You can’t just “buy commodities” anymore, you have to look at geo-politics, uses, inflation and so many other factors.
Buckle up. The volatility isn’t going anywhere.