Energy and Metal Prices Slide as Agricultural Commodities Diverge

Global commodity markets are entering a transformative phase in 2025, marked by a sharp divergence in price trends across sectors. According to the World Bank, energy prices are projected to fall significantly this year, metals are retreating, and agricultural commodities are showing mixed signals. Meanwhile, precious metals like gold are surging as investors seek safe-haven assets amid economic uncertainty.

Energy Sector Faces Oversupply Challenges

The energy sector is seeing some of the most dramatic price shifts. The World Bank forecasts a 17% drop in energy prices in 2025, with Brent crude oil expected to average $64 per barrel, a steep fall from $81 in 2024. The surplus in global oil supplies—estimated at 700,000 barrels per day—is a key driver, largely due to the rapid adoption of electric vehicles, particularly in China where over 40% of new car sales last year were electric or hybrid.

Coal is also under pressure, with prices forecasted to tumble 27% in 2025 as developing economies pull back on coal-fired power generation. Natural gas, however, presents a more complicated picture: while U.S. prices are poised to surge by 51% due to domestic supply bottlenecks, European natural gas may see a more modest 6% increase amid continued supply concerns.

For a deeper dive into these shifts, check out Reuters’ report on the World Bank’s commodity outlook.

Metals, Agriculture, and Precious Metals: A Mixed Bag

Metals are heading lower, with a projected 10% price decline in 2025. Weak industrial activity and ample supplies are pushing prices down, though tin is an exception. Tightened tin supply conditions are expected to lift its price, contrasting the general metals downturn.

In agriculture, global food prices are expected to dip by 7% in 2025, supported by better supply and lower demand. But not all crops are following the trend. Arabica coffee is forecast to soar by over 50% before a correction in 2026, while cocoa prices are expected to rise by 9% this year, followed by a 13% decline next year. These volatile moves will likely impact commodity-exporting nations, many of which rely heavily on agricultural trade.

Precious metals continue to shine as economic safe havens. Gold prices are set to reach new records, staying roughly 150% above pre-pandemic levels over the next two years. Silver and platinum are also climbing, with projected gains of 16.7% and 9%, respectively, reflecting investor demand for hedges against market volatility.

Implications and Global Impact

The broad decline in commodity prices could help ease global inflation, offering relief to central banks and consumers alike. But for resource-dependent developing nations, falling revenues pose economic risks. The World Bank recommends these countries pursue reforms such as trade liberalization and private sector investment to buffer against commodity price shocks.

For additional insights, explore the World Bank’s Commodity Markets Outlook, which provides detailed forecasts and policy recommendations for 2025 and beyond. As markets adjust, these shifts will likely reshape global trade dynamics and investment strategies in the coming months.