Best commodities to invest and trade in for 2025: strategies and analysis

6 min readJan 17, 2025

Commodities offer diverse opportunities, and as 2025 approaches, market trends are reshaping the landscape. This article analyzes the top commodities to watch, providing insights — not recommendations — for informed decisions.

Top commodities to watch in 2025

Gold: a timeless safe haven

Gold is expected to remain a standout performer in 2025, buoyed by falling yields and supportive monetary policies. With central banks, particularly in emerging markets, diversifying their reserves away from the U.S. dollar, gold demand is likely to increase. The ongoing rate cuts by major central banks also reduce the opportunity cost of holding gold, attracting investors to this safe-haven asset.

Scenario: In early 2025, if the Federal Reserve signals a pause in rate hikes, gold could rally as real yields decline.
Trading idea: If gold consolidates near $1,900 and forms a bullish reversal pattern (e.g., double bottom), enter a long position targeting $2,000 with a stop-loss at $1,880.
Example: In March 2023, gold surged above $2,000 during banking sector instability. In a similar scenario, look for geopolitical events or economic stressors to spark demand for gold.

Natural gas: a booming sector

Natural gas is set for a strong year, fueled by geopolitical shifts and increased global demand for LNG. The expiration of the Russia-Ukraine pipeline deal and the addition of new U.S. export capacity will likely drive demand and prices higher. Industrial use and exports to Mexico are expected to further bolster the market.

Scenario: Winter 2025 sees colder-than-expected temperatures in Europe, causing natural gas demand to spike due to heating needs.
Trading idea: Buy natural gas futures or options if prices hold above $4.00/MMBtu during October, with a target of $4.80 and stop-loss at $3.80.
Example: In December 2022, U.S. LNG exports surged due to European demand. Anticipate a similar scenario with global supply constraints.

Cocoa: a supply-driven opportunity

Cocoa, which was the best-performing commodity in 2024, is likely to see continued volatility in 2025. Adverse weather conditions in West Africa, the region responsible for 75% of global production, have tightened supply. With limited relief in sight, cocoa could remain an attractive trading opportunity.

Scenario: In 2025, West African cocoa production remains low due to persistent adverse weather and logistical challenges.
Trading idea: Buy cocoa futures if prices retest $3,400 per metric ton after a dip, with a target of $3,700. Use the WisdomTree Cocoa ETC for indirect exposure.
Example: In 2023, cocoa prices rallied due to similar weather constraints. Monitor export data and crop reports for actionable signals.

Grains: rebounding after declines

Grain markets, particularly wheat and maize, are showing signs of bottoming out after significant price drops in 2024. Rising fertilizer costs and tightening supply chains are expected to support a gradual price recovery. However, soybeans may remain under pressure due to oversupply and weak demand.

Scenario: A drought in key U.S. and Russian wheat-producing regions reduces global supply in 2025, driving prices higher.
Trading idea: Buy wheat futures near $5.50 per bushel during planting season, targeting $6.50 with a stop-loss at $5.20.
Example: In 2021, droughts caused wheat prices to soar; similar conditions could repeat given climatic unpredictability.

Germanium: a rare Earth essential

Geopolitical tensions and export restrictions from China continue to make germanium a strategic commodity. Used in renewable energy and electronics, its scarcity and high demand position it as a lucrative investment for 2025.

Scenario: Tensions between the U.S. and China lead to export restrictions on rare earth elements, including germanium.
Trading idea: Invest in stocks of companies producing rare earth metals or ETFs like the VanEck Rare Earth/Strategic Metals ETF. Monitor policy announcements and trade sanctions as triggers.
Example: In 2023, China’s export restrictions on germanium and gallium boosted prices significantly, creating opportunities in mining stocks.

Brent crude: production cuts amid transition

While the global transition to renewable energy impacts long-term oil demand, Brent crude remains a critical commodity for traders. OPEC+ production adjustments and economic recoveries in key regions will likely drive short- to medium-term price fluctuations, presenting lucrative trading opportunities.

Scenario: OPEC+ announces production cuts in mid-2025 to stabilize falling oil prices. Prices rebound sharply from $70 per barrel.
Trading idea: Go long on Brent crude at $72 with a target of $85, placing a stop-loss at $68. Pair this trade with WTI for spread opportunities.
Example: In October 2022, OPEC+ production cuts led to a rally in oil prices, showcasing the group’s ability to influence market dynamics.

Silver: dual-role demand surge

Silver continues to benefit from its dual role as both an industrial metal and a safe-haven asset. With green energy initiatives gaining momentum, the metal’s use in solar panels and electronics positions it as a key commodity for 2025.

Scenario: Governments expand renewable energy investments, boosting demand for silver in solar panel production.
Trading idea: Enter long positions if silver holds above $23 per ounce after a breakout, targeting $25. Use CFDs or ETFs like the WisdomTree Physical Silver ETC for exposure.
Example: In mid-2023, silver prices rose alongside increased renewable energy adoption, reinforcing its industrial demand.

Coffee: brewing profits amid climate uncertainty

Coffee remains one of the most climate-sensitive commodities, with yields highly dependent on weather conditions in key growing regions like Brazil. As global demand rises, any supply disruption can create significant trading opportunities.

Scenario: Brazilian coffee yields fall due to frost in key growing regions, tightening global supply.
Trading idea: Go long on coffee futures at $2.20 per pound after confirming a breakout above $2.10, with a target of $2.50 and stop-loss at $2.00.
Example: In 2021, similar climate issues led to a sharp rise in coffee prices, showcasing the market’s sensitivity to weather conditions.

Commodity portfolio for 2025

To build a well-balanced commodity portfolio, diversify across different sectors while considering risk appetite and market trends.

Precious metals:

Gold: 25% allocation via ETFs or futures (e.g., Invesco Physical Gold ETC).
Silver: 15% allocation for industrial and safe-haven exposure.

Energy:

Natural Gas: 20% allocation through futures or ETFs (WisdomTree Natural Gas ETC).
Brent Crude: 15% allocation via CFDs or futures contracts.

Continue reading:

Best commodities to watch in 2025: Top investments and trading insights

Best commodities to trade in 2025: Top trends & strategie

Discover top commodities for 2025, with insights on gold, natural gas, cocoa, grains, and rare earth metals.

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