Looking back at 2024, commodities saw notable volatility driven by geopolitical tensions, supply chain disruptions, inflation, and shifting demand patterns. Agriculture markets stood out with softs up 46.87% led by Cocoa +175.14% and coffee +80.56%. Livestock up16.37% led by Lean Hogs +19.61%, Feeder Cattle +17.88% and Live Cattle +11.61%. The largest price falls were in grains (-14.75%) led by Soybeans -21.88%, Rough Rice -18.52% and Soybean Meal -17.90%.
Gold hit record highs as inflation, safe haven, and Russia and China buying to avoid sanctions pushed it higher. The price rose against multiple currencies, including the U.S. dollar. Oil prices in 2024 traded in a relatively stable range given the world conflicts in energy supply related regions.
Intraday Brent prices stayed within a $24/b range, between $68/b and $93/b the narrowest trading range since 2019. Adjusting for inflation, 2024 was the narrowest since 2003. A moribund world economy working against Middle East and Russian tensions. U.S. energy companies played the smart card pushing production higher familiar with the cycle of oil prices. Natural gas demand grew as did record U.S. production, we saw increased electricity consumption, driven by the AI mania.
Futures Performance in 2024
Agriculture Futures
Cocoa
Cocoa futures were the best performing in 2024, surging by 176% for the year. Cocoa a great example of how controlled or limited surplus can determine price. Africa produces 60% of global cocoa and nearly half of the world’s cocoa comes from just two West African countries, Côte d’Ivoire and Ghana.
“Cocoa futures climbed above $12,000 a ton in New York, reaching a fresh record amid mounting worries over reduced output in top grower Ivory Coast. The most-active contract rose as much as 7.4% to $12,636 a ton… The surge in prices — New York futures have tripled this year — has also pushed companies out of the market…” December 18 – Bloomberg (Mumbi Gitau and Ilena Peng)
The surge in 2024 cocoa prices was due to political and weather disruptions in West Africa. The crops were already struggling thanks to underinvestment in cocoa farms with growers struggling to replant diseased trees.
Coffee
Coffee futures followed cocoa higher and was up 73% for the year, reaching a 47-year high as markets grappled with persistent supply concerns in key growing regions. The premium bean, arabica futures price doubling in 2024. Extreme weather in Brazil and Vietnam affected supply whilst demand was pressured by booming demand in markets like China.
“Coffee hit a record high in New York on mounting worries over a global supply crunch that have made it one of the year’s hottest commodities. Major trader Volcafe Ltd. cut its outlook for production at world’s top supplier Brazil after a crop tour revealed the severity of an extended drought… Futures for the arabica variety have surged more than 80% this year amid crop setbacks in key growers… They rose as much as 5.5% on Tuesday, touching the highest in data going back to 1972…” December 10 – Bloomberg (Celia Bergin and Mumbi Gitau)
Cocoa and coffee brought inflation to the consumers drinking and and eating habits as companies passed on the price rises.
Metals
The best performing metal in 2024 was Gold with a return of over 29%. Another precious metal, silver gained over 27%. Gold saw record highs in multiple currencies including the Euro, Pound, Australian and U.S. dollars. The worst performer was in the industrial metals, no surprise as China lurched from one economic crisis to the next. Steel and iron ore the weakest with lithium again declining despite all the EV demand hype and Chinese and Russian threats to supply.
Silver gained as a hedge against uncertainty and industrial usage hopes with its critical role in AI hardware, electric vehicles, and renewable energy technologies.
Metals February 2025 Update:
Copper
Copper is the bellwether industrial metal and moves on supply risks and hopes for global recovery in demand. Disruptions at major mines and Chinese plants which produce more than half of the world’s refined copper impact price.
UPDATE February 26 – Bloomberg (Alfred Cang, Archie Hunter and Mark Burton): “The world’s top commodity traders are rushing to ship copper to the US from as far afield as Asia as Donald Trump’s threat of import tariffs on the metal creates a huge opportunity for profit. The gap between copper prices in the US and the rest of the world widened sharply after the president… ordered the Commerce Department to examine potential levies on the metal. On Wednesday, prices on New York’s Comex surged as much as 4.9% to trade more than $1,000 a ton above the London Metal Exchange benchmark, which rose 1.2% to about $9,500 a ton.”
Gold
Gold hit record highs as inflation, safe haven, and Russia and China buying to avoid sanctions pushed it higher. The price rose against multiple currencies, including the U.S. dollar.
- Russians bought a record amount of gold in 2024 as they sought to protect their savings amid sanctions, obtaining the equivalent of about a fourth of the country’s annual output.
- Consumers purchased 75.6 metric tons (2.7 million ounces) of gold in bullion, coins and jewelry in 2024, the fifth biggest figure among all nations
- That’s an increase of 6% on the previous year and more than 60% since President Vladimir Putin ordered his troops into Ukraine almost three years ago. – World Gold Council data
Goldman Sachs in their November 2024 investor letter ‘Go for gold,’ analysts including Daan Struyven said “Gold will rally to a record next year on central bank buying and US interest rate cuts. They listed the metal among top commodity trades for 2025 and said prices could extend gains during Donald Trump’s presidency. GS ‘reiterating a target of $3,000 an ounce by December 2025. The structural driver of the forecast is higher demand from central banks, while a cyclical lift would come from flows to exchange-traded funds as the Federal Reserve cuts, they said.”
- Update February 17 – Reuters (Sherin Elizabeth Varghese): “Goldman Sachs… raised its year-end 2025 gold price forecast to $3,100 per ounce, up from $2,890, citing sustained central bank demand. The bank estimates that ‘structurally higher central bank demand will add 9% to the gold price by year-end, which combined with a gradual boost to ETF holdings as the funds rate declines.’”
- Update February 17 – Financial Times (Leslie Hook and Ian Smith): “Gold has become the best performing ‘Trump trade’ in recent weeks…, as fears of a trade war and a potential hit to global growth fuel demand for the haven metal. Bullion has risen in price every week this year as Trump starts to impose sweeping tariffs, and hit a new record of $2,942.70 per troy ounce this week… ‘When trade contracts, gold takes off,’ said James Steel, precious metals analyst at HSBC… ‘The more tariffs that go on, the more this is going to disrupt world trade, and the better it will be for gold,’ he added. “
Central bank buying has been a significant driver of gold strength since 2022.
- Global central banks, led by China and India, continued adding to their gold reserves according to the World Gold Council.
- Update February 7 – Bloomberg (Yihui Xie): “China’s central bank expanded its gold reserves for a third month in January, even as the precious metal kept rallying to a record high. Bullion held by the People’s Bank of China rose by 0.16 million troy ounces last month… The central bank resumed adding gold reserves in November after a six-month halt that followed an 18-month buying spree.”
- China’s central bank expanded its gold reserves for a second month in December, signaling renewed appetite after temporarily pausing purchases last year as prices soared. Bullion held by the People’s Bank of China rose to 73.29 million fine troy ounces in December, from 72.96 million in the previous month… The purchase shows the PBOC is still keen to diversify its reserves even with gold at historically expensive levels. January 7 – Bloomberg (Sybilla Gross)
- “China’s net gold imports via Hong Kong in November more than doubled from October, marking the highest level in seven months… The world’s top gold consumer imported a net 33.074 metric tons in November, up 115% from 15.414 tons in October, its highest level since April 2024. Total gold imports via Hong Kong were up 60% at 45.22 metric tons from October” December 30 – Reuters (Anushree Mukherjee)
- “China’s central bank expanded its gold reserves in November, ending a six-month pause in purchases after prices for the precious metal rose to a record. Bullion held by the People’s Bank of China climbed by 160,000 fine troy ounces last month to 72.96 million fine troy ounces… The PBOC had added to its stockpiles for 18 consecutive months up until April this year, helping to underpin the strength in bullion prices.” December 6 – Bloomberg (Sybilla Gross)
- China’s official reserve assets rose to the highest since November 2015. The country’s foreign exchange reserves rose to $3.2457 trillion by the end of March, the highest since December 2021, as the central bank aims to maintain stable holdings to fend off risks. They rose 0.6% from February and were up 1.9% from a year earlier.
The retail investor and consumers have been rushing to buy gold
- Consumers purchased 75.6 metric tons (2.7 million ounces) of gold in bullion, coins and jewelry in 2024, the fifth biggest figure among all nations. – World Gold Council data
- Costco is selling gold bars to members
- “Chinese buyers, spooked by a protracted property slump and a recent stock-market rout, are rushing toward gold as economic uncertainty looms… Gold consumption in China rose 5.94% from a year earlier to 308.91 tons in the first quarter, the state-backed China Gold Association said… Meanwhile, China’s imports of gold raw materials surged 78% in the same period, helping the country’s total gold output to jump 21.16%… In January-March, Chinese buyers’ purchase of gold bars and coins rose 26.77% to 106.32 tons, amounting to around a third of total consumption.” Wall Street Journal
Gold Paper versus Physical Delivery Issues Push Bullion Prices Higher
- Update February 2 – Bloomberg (Jack Ryan and Jack Farchy): “JPMorgan… will deliver gold bullion valued at more than $4 billion against futures contracts in New York in February, at a time when surging prices and the threat of import tariffs are fueling a worldwide dash to ship metal to the US. The bank, which is by far the world’s biggest bullion dealer, was one of several institutions to declare plans on Thursday to deliver bullion against contracts traded on CME Group’s Comex that will expire in February. The delivery notices — which total 3 million troy ounces of gold — were the second largest ever in bourse data going back to 1994… Fears of imminent tariffs on imports following the election of US President Donald Trump have caused prices for gold futures on Comex to surge over spot prices in London.”
- “A surge in gold shipments to the US has led to a shortage of bullion in London, as traders amass an $82bn stockpile in New York over fears of Trump administration tariffs. The wait to withdraw bullion stored in the Bank of England’s vaults has risen from a few days to between four and eight weeks, according to people familiar…, as the central bank struggles to keep up with demand. ‘People can’t get their hands on gold because so much has been shipped to New York, and the rest is stuck in the queue,’ said one industry executive. ‘Liquidity in the London market has been diminished.’” January 29 – Financial Times (Leslie Hook)
Energy
Oil prices in 2024 traded in a relatively stable range given the world conflicts in energy supply related regions. Intraday Brent prices stayed within a $24/b range, between $68/b and $93/b the narrowest trading range since 2019. Adjusting for inflation, 2024 was the narrowest since 2003. A moribund world economy working against Middle East and Russian tensions.
U.S. energy companies played the smart card pushing production higher familiar with the cycle of oil prices. Natural gas demand grew as did record U.S. production, we saw increased electricity consumption, driven by the AI mania.
Energy February 2025 Update
US Crude Oil (WTI)
EIA Wrap on Oil Prices for 2024
Benchmark Brent crude oil futures prices averaged $80 per barrel (b) in 2024, $2/b less than in 2023. Intraday prices stayed within a $24/b range, between $68/b and $93/b (after rounding), which was the narrowest trading range since 2019. Adjusting the trading range for inflation, last year was the narrowest since 2003.
Front-month Brent crude oil prices were highest in 2024 during April, closing at $91/b. Prices generally declined through the remainder of 2024, with smaller price rallies driven by OPEC+ announcements in June and September regarding delayed production increases. Further conflict flare-ups and risks of armed conflict between Israel and Iran led to short-lived price increases.
During the first quarter of 2024, Brent oil prices generally rose due to heightened geopolitical risks largely associated with the growing Middle East conflict. Although fighting between Israel and Hamas did not affect regional supplies, Middle East conflicts increase the risk of regional supply disruption and can increase oil prices. In addition, Yemen-based Houthi militia began attacking vessels entering the Red Sea in late 2023 and early 2024, causing major trade disruptions as ships, including oil tankers, re-routed to avoid the area.
Following brief increases, prices often declined quickly. Economic weakness and concerns about oil consumption—particularly regarding trends in consumption of diesel and gasoline in China—weighed on prices during the second half of 2024. We estimate global oil consumption grew by less than 1 million barrels per day (b/d) in 2024, less than the annual average growth in the decade before the pandemic of 1.5 million b/d, according to data in their December Short-Term Energy Outlook.
In early September, crude oil prices declined to their lowest point of the year at $69/b. The trading range of Brent crude oil prices in real (inflation-adjusted) terms in 2024 was the narrowest in more than 20 years.
Daily: WTI Crude Oil gave back all its rally that evolved from retesting the pennant breakout last December after completing the correction in 3 waves. from there it has fallen to new lows and the upside burst has effectively rinsed short and trapped new speculative buyers with the market now rinsing them as it falls to test support. The market has behaved as expected as we have said being in a completive mode for bulls with the upside impulse, it was a question of degree on the topside, as it will be on the downside. Use the Murrey math 240/60 grid. Was oil completing a C or IV? Support is previous lows and the bull flag. The bear case is the high was a complete 5.
Weekly: WTI crude oil futures held the support line from July 2021, having plunged around 50% off 2022 highs. The market is now back testing it. The break to the topside of its sphere of influence to close out the quarter over Kijun and Tenkan failed, and which are now resistance. Risk support is the grid. Resistance weekly channel, Murrey Math levels and previous breaks (off monthly). Bear case is Wave 5 complete.
What we broke……. Crude Oil in the past quarter built a huge bull flag. We watch if the recent break was false, or we fail. Very clear pattern.
The key is crowd behavior to help tell the story which in energy is often around geopolitics. A great example of why we watch ABC corrections and from here we get the energy from the break being balanced. This move that was powered by 50 dma Tenkan spit of a spit – hence the fractal energies reverberations.
US Natural Gas (Henry Hub)
Update January 12 – Bloomberg (Anna Shiryaevskaya, Priscila Azevedo Rocha, Stephen Stapczynski, and Ruth Liao): “The world is bracing for a fight for natural gas supplies this year, prolonging the pain of higher bills for consumers and factories in energy-hungry Europe and putting poorer emerging countries from Asia to South America at risk of getting priced out of the market. For the first time since the energy crisis was turbocharged by Russia’s war in Ukraine, Europe risks failing to meet its storage targets for next winter, setting the stage for one last scramble for supplies before new liquefied natural gas capacity starts to ease the situation next year.”
Daily: US Natural Gas futures are a great example of rebalancing mania. The market is still correcting the manic 5 post the Ukraine invasion and beyond. Since the breakdown of the correction channel with failed breakups we have continued to multi year lows in a pennant formation after holding the daily 1/8. We now look at our Adam’s theory fractal rules with fractal spits powering these moves lower. Two clear alternatives, we are correcting the highs 5 or that was a 3 and we go higher. Resistance is heavy: 2/8 and cloud above. Kijun, 50 dma and cloud. Support is previous lows. Important to watch how this energy was built for shape correlation.
Like the larger wave on the way up it accelerated through previous highs (flat topped triangle energy) and over the resistance at 8/8 and new highs. We successfully tested that break in a pennant ABC. Previous highs (flat topped triangle energy) and 8/8 and new highs underscore the structure that fed the move and is key longer term in the collapse lower.
Weekly: Natural gas has been busy correcting the past months when it blew through all levels of support after breaking the weekly 50wma and the Kijun gave a kiss of death. From there we formed an island reversal which has resolved to the topside, trapping shorts and bears. Recall it broke down out of the corrective channel (Wave 4 or IV) to new multi-year lows. The instability and volatility stem from the sharp reversals that have failed indicative of speculative fervor like the previous impulsive spikes. Support is the flat Kijun and Tenkans. Resistance the near highs and previous uptrend. Bulls need all the damage down to be rebuilt. Kijun became the accelerator given energy lower and now higher came from a clean break of the Kijun.
BDI Freight Index
Feb 28, 2025, Update
- The Baltic Exchange’s dry bulk sea freight index, which measures shipping rates for vessels transporting dry bulk commodities, logged the 12th consecutive session of gains on Friday, rising 70 points to its highest since December 3rd at 1,229 points.
- The capesize index, which typically tracks vessels transporting 150,000-ton cargoes such as iron ore and coal, climbed 245 points to an over 12-week high of 1,818 points.
- The panamax index, which usually tracks vessels carrying 60,000-70,000 tons of coal or grain, was down for the fourth session, falling 29 points at 1,063 points;
- The supramax index eased for the second session, shedding 8 points at 895 points. The index rose more than 18% for the week, registering its second straight weekly gain.
- Source: Baltic Exchange
Looking Ahead to 2025
Commodity markets were pricing in odds that US President Donald Trump’s sanctions against Canadian raw materials like oil to go higher. With thumping the table from Goldman Sachs, warning of higher gasoline prices in the Midwest if penalties cover crude flows. Their analysts say differences in regional pricing for commodities including crude, copper and aluminum signal an 85% probability of a 10% tariff being applied, analysts. Lower probabilities were linked with higher eventual tariffs, they added.
“Raw materials markets from energy to metals are braced for a wave of disruption as Trump seeks to reshape global trade.” – Goldman Sachs
With commodities always remember seasons, preferences, demand and supply change. Why we see so many blowouts in the futures markets as analysts chasing commissions and reading the same script lead investors over the cliff, don’t be that gal or guy. The success of certain commodities in 2024 doesn’t automatically transfer to the next year.
Updating in our February letter we can see Goldman Sachs couldn’t be more wrong about energy prices with oil continuing to fall. To be fair Goldman Sachs in their November 2024 investor letter ‘Go for gold,’ analysts including Daan Struyven said “Gold will rally to a record next year on central bank buying and US interest rate cuts. They listed the metal among top commodity trades for 2025 and said prices could extend gains during Donald Trump’s presidency. GS ‘reiterating a target of $3,000 an ounce by December 2025. The structural driver of the forecast is higher demand from central banks, while a cyclical lift would come from flows to exchange-traded funds as the Federal Reserve cuts, they said.”
Note in February coffee was higher and cocoa lower, just to confuse the retail brokers out there. Do your own research and understand group think and herd mentality.
The message is evaluating each commodity on its merits, risk, pricing, sensitivity to global supply and demand dynamics. Lithium is the poster child of this. Lithium had the top return in 2021 and 2022 as the hyped demand for EVs soared and returned over 442% in 2021. Since those heady days it has fallen double digits annually. This coincided with the peak returns for many of the auto and EV-related stocks. Beware the hype.
What we do know is the influence of geopolitics on the market will continue. Resolving and continuing geopolitical conflicts could post risks and shifts in supply chains.
Remember a week is a long time in futures markets. The last week of February 2025 = volatility.
Note these charts, opinions news and estimates and times are subject to change and for indication only. Trade and invest at your own risk.
Focus on yourself and what YOU CAN INFLUENCE, set your trading plan and goals in be set for 2025.
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