Mecklai Graph of The Week

Diverging Paths In Commodities

20 Aug, 2025
Graph of the week

In 2025, commodities have been driven by contrasting forces: Gold has surged to record highs on strong central bank buying and safe-haven flows, oil has fallen sharply amid oversupply and weaker Asian demand, while base metals have been caught between slowing global growth and long-term support from the energy transition and infrastructure investment.


Gold has been the clear outperformer, rising nearly 30% year-to-date and hitting record highs, supported by central bank buying, safe-haven demand, and de-dollarization flows. UBS and other banks now project further gains into 2026, highlighting its role as the anchor of the commodity basket. In contrast, oil has slipped over 12% this year, with Brent trading near $66 as the IEA warns of a looming supply overhang from OPEC output against weakening demand in China and Asia.


Industrial and base metals remain caught between cyclical softness and structural strength. The World Bank expects overall commodity prices to fall 12% in 2025 and another 5% in 2026, reflecting slower global growth, but demand linked to the energy transition and electrification continues to underpin copper, nickel, and other key metals.