Gold Rush and Energy Dips: Key Commodity Shifts Shaping Global Trade

Energy and Agricultural Commodities React to Trade Truce and Supply Outlooks

Global commodity markets are navigating a volatile period as geopolitical developments and shifting trade policies redefine demand and pricing patterns. One of the most significant developments is the 90-day tariff truce between the U.S. and China, which saw the U.S. slash tariffs from 145% to 30% and China lower duties on American imports to 10%. This temporary détente triggered a short-term rebound in both equities and commodities, with Brent crude rising above $65 per barrel.

Despite the headline gains, underlying fundamentals remain fragile. According to S&P Global Commodity Insights, U.S. oil output is projected to decline in 2026, falling to 13.33 million barrels per day amid weaker global demand and a looming supply glut. This reversal in production momentum raises concerns for long-term market stability.

China’s energy import patterns further complicate the picture. While the trade truce might suggest a thaw in U.S.-China energy flows, Reuters reports that Beijing has turned decisively toward other suppliers like Australia. U.S. crude exports to China have dropped sharply to 242,000 barrels per day in 2024 from 400,000 in 2023. LNG shipments from the U.S. to China, once a booming sector, have completely halted since February 2025.

In the agricultural space, the trade standoff has long-lasting implications. Although tensions have eased, U.S. farmers are still recovering from past disputes that slashed demand for key exports like soybeans. The USDA reports that corn exports are expected to hold steady while soybean shipments may decline, though strong domestic demand is helping prop up prices. Diversification and strategic selling remain essential for farmers coping with continued uncertainty.

Gold Surges on Safe-Haven Demand While Industrial Metals Lag

Amid trade volatility and investor unease, gold has emerged as a clear winner in commodity markets. The precious metal has surged over 20% since late 2024 and continues to gain traction in May 2025. Analysts predict prices could reach $3,700 per ounce by 2026, with even loftier projections reaching $5,000 by 2028. Central banks across emerging markets are accelerating gold purchases as part of a broader effort to shield reserves from sanctions and geopolitical shocks.

Gold’s appeal extends beyond central banks. Retail demand is booming, with outlets like Costco experiencing widespread sellouts of bullion products. Investment in gold-backed ETFs is also nearing all-time highs, reflecting broader skepticism toward fiat currencies and traditional finance channels. The Guardian notes that the metal’s popularity has reached levels not seen since the 2008 financial crisis.

By contrast, industrial metals and energy commodities have seen mixed performance. The World Bank’s April update shows a 7.6% decline in the energy index, with natural gas plunging 17.6% and crude oil down 6.8%. Non-energy commodities fell by 2.6%, driven by drops in base metals, food, and raw materials. Fertilizers and precious metals were among the few categories to post gains.

As we move into the second half of 2025, investors and stakeholders in energy, agriculture, and precious metals should prepare for continued volatility. Staying informed and agile will be key to navigating the next wave of commodity market disruption.