Oil, Gold, and Palm Oil: How Global Trade Tensions Are Reshaping Prices

As of April 23, 2025, the global commodity landscape is undergoing significant shifts, with crude oil, gold, and agricultural staples reacting to intensifying trade frictions, central bank anxieties, and updated demand forecasts. These developments are shaping investor decisions and policymaker strategies alike.

Oil Faces Uncertainty as Demand Outlook Weakens

The oil market continues to swing amid geopolitical tensions and a less bullish demand outlook. The International Energy Agency (IEA) recently revised its global oil demand growth forecast for 2025, cutting it by 300,000 barrels per day. The new projection of 730,000 barrels per day reflects mounting concern that trade disputes between major economies—particularly the U.S. and China—are softening economic momentum.

Brent crude prices initially dipped but later rebounded nearly 2% following new sanctions on Iran and a strong performance in equities. However, underlying uncertainty about long-term demand remains, especially as the IMF downgraded global growth projections to just 2.8% for the year. (IEA Report)

Gold Soars as Investors Flee to Safety

In stark contrast to energy markets, gold is experiencing a powerful rally. Spot gold prices have surpassed $3,500 per ounce—an all-time high. This surge is fueled by investor fears around political instability in the U.S., including aggressive rhetoric toward Federal Reserve Chairman Jerome Powell and an increasingly erratic trade stance from the White House.

Central banks and private investors alike are seeking safety in precious metals, a trend bolstered by inflation concerns and recession risks. The IMF now estimates a 40% chance of a U.S. recession in 2025, further justifying gold’s recent gains. (AP News Report)

Palm Oil Demand Rebounds in Asia Despite Price Drop

Meanwhile, in the agricultural sector, palm oil is drawing renewed interest from key buyers. The Malaysian Palm Oil Council (MPOC) has noted a spike in demand from China and India, driven largely by attractive pricing. The average contract price has dropped 12% year-to-date to around 3,900 ringgit ($889) per metric ton.

This comes despite production challenges in Malaysia. Although output improved in March, full-year projections suggest a slight decline to 19 million tons. Seasonal patterns and early-year shortfalls have analysts expecting lower yields through September. (Reuters Coverage)

With markets reacting to economic shifts and political volatility, traders and businesses across sectors are recalibrating. As 2025 unfolds, the performance of energy, precious metals, and agricultural goods will remain closely tied to macroeconomic signals—and, increasingly, geopolitical headlines.