The global commodity market in 2025 presents a starkly divided picture of 'ice and fire.'
Driven by the combined forces of geopolitical conflicts, shifts in monetary policy, and changes in industrial demand, metal commodities such as gold, silver, and copper have surged sharply, becoming both a 'safe haven' and a 'growth engine' for asset allocation. In contrast, international oil prices have continued to decline under the dual pressures of oversupply and weak demand, weighing on the share prices of related oil companies. Behind this divergence, speculative capital has certainly played a role, but there is also fundamental support, reflecting a deep interweaving of macroeconomic cycles, industrial logic, and policy expectations.
Precious Metals: Safe Haven Meets Liquidity Resonance, with Silver Becoming the 'Star Performer' of the Year
In 2025, the precious metals sector experienced a comprehensive surge, with silver's performance particularly astonishing, not only significantly outperforming gold but also becoming the 'star performer' in the entire commodity market for the year. This round of precious metals' rise was not driven by a single factor but rather the result of combined forces from safe-haven demand, loose monetary policies, supply-demand imbalances, and speculative sentiment.
As shown in the chart below, the price of gold rose over 65% from $2,624.50 per ounce at the beginning of the year to $4,338.76 today.
The price of silver increased even more dramatically, rising from $28.91 per ounce at the start of the year to $74.731, marking an increase of over 158%, as shown in the chart below.
Demand Side: Triple Logic Supporting Inflows into Hard Assets
The ongoing escalation of geopolitical risks has provided a solid foundation for safe-haven demand in precious metals. The U.S. blockade on Venezuela’s oil supply continues, and unresolved geopolitical conflicts persistently unsettle market sentiment. Rising uncertainty has driven global investors to proactively increase holdings of safe-haven assets such as gold and silver.
At the same time, the growing prominence of global debt issues has further strengthened the allocation value of hard assets. Japan and the United States are facing increasing debt burdens, and expectations of rising long-term bond yields have triggered large-scale outflows from the bond market, redirecting funds toward precious metals with preservation attributes.
The shift in the Federal Reserve’s monetary policy became a 'catalyst' for the rise in precious metals. In 2025, the Federal Reserve gradually eased its monetary policy by cutting interest rates, halting balance sheet reduction, or even initiating quantitative easing measures to inject liquidity, significantly lowering the opportunity cost of holding precious metals and directly driving up their prices.
Looking ahead to 2026, the market broadly anticipates that the Federal Reserve will further ease its monetary policy, especially if Trump succeeds in manipulating the Fed. This would intensify concerns over the value of the US dollar and could reinforce the trend of capital flowing into hard assets.
The continuous gold purchases by multiple central banks have provided robust support for gold prices, akin to a 'stabilizing force.' According to data from the World Gold Council, as of the end of October 2025, global central banks had cumulatively purchased 254 tons of gold during the year. Poland, Kazakhstan, Azerbaijan, Brazil, Turkey, and other countries were among the primary buyers. These emerging market central banks' gold acquisition is fundamentally driven by long-term strategic considerations, aiming to diversify their foreign exchange reserve structures and reduce reliance on US dollar-denominated assets. This 'de-dollarization' trend provides strong support for gold prices in the medium to long term.
Notably, the extreme divergence in the gold-to-silver ratio has signaled a clear opportunity for silver to catch up. The gold-to-silver ratio (the number of ounces of silver equivalent to one ounce of gold) is a core indicator of silver's relative valuation. Generally, when this ratio exceeds 90, it implies that silver is undervalued relative to gold. In the first half of 2025, aggressive tariff measures introduced after Trump took office triggered market panic, prompting investors to flock to gold as a safe haven, which drove gold prices sharply higher and caused the gold-to-silver ratio to soar to extreme levels above 100 between April and May. This signal was keenly captured by the market, serving as a definitive guide for traders to buy silver.
More importantly, the demand scenarios for silver are far broader than those for gold. Beyond its safe-haven attributes, silver is extensively used in industrial applications such as new energy vehicles, photovoltaic power generation, and medical device coatings. The sustained growth in industrial demand has further exacerbated supply-demand imbalances.
Supply Side: Inventory shortages and limited production expansion amplify price volatility.
In sharp contrast to the robust demand side, the supply side of the silver market exhibits significant tension. Unlike gold, the London market lacks physical silver reserves as backing—large quantities of gold bars are stored in central bank vaults at the Bank of England and can be lent out during liquidity crunches to alleviate supply-demand pressures. However, no such reserve mechanism exists for silver, making it more prone to substantial price fluctuations during periods of surging demand.
The expansion of global silver production is also constrained. Declining ore grades and insufficient development of new projects have made it difficult to quickly increase silver supply.
Furthermore, stricter regulations and environmental restrictions in major silver-producing countries may lead to further contraction in supply, becoming a critical factor suppressing silver availability.
As shown in the chart below, silver has been in a supply deficit since 2021.
Short-Term Impact: Tariff expectations and speculative sentiment amplify price volatility.
The tariff expectation disturbance at the beginning of the year laid the groundwork for the surge in silver prices by the end of the year.
In early 2025, market speculation that the United States might impose additional tariffs on silver led to a large amount of silver being pre-shipped into warehouses associated with the New York Mercantile Exchange (NYMEX), directly causing a sharp reduction in available silver inventories at the London Metal Exchange (LME), the world’s primary spot trading center. When silver demand surged in October, the contradiction of inventory shortages became fully apparent, directly driving a sharp rise in silver prices.
Speculative activities have become the core driver exacerbating fluctuations in silver prices. Compared to the gold market, the daily trading volume in the silver market is significantly lower, and the characteristic of insufficient liquidity makes it easy for short-term buy-sell imbalances to cause significant price swings.
More importantly, the main forms of silver trading are concentrated in futures, ETFs, derivatives, and other 'paper silver' sectors. This financialized trading structure provides speculators with convenient opportunities to enter the market during key periods such as holidays. Meanwhile, physical delivery squeezes by futures contract holders triggered short-covering, further pushing up silver prices in the short term. As silver prices soared, multiple commodity exchanges worldwide tightened margin requirements, and the emergence of liquidation positions further intensified market volatility, which is the direct cause of the recent extreme intraday fluctuations in silver prices.
Market data supports this analysis: the spot price of silver surged from $47.32 per ounce on October 1 to the current $75.63 per ounce, representing an increase of 59.83%. During the same period, the price of gold rose from $3,865.74 per ounce to $4,387.06 per ounce, marking an increase of only 13.49%, significantly lower than that of silver. Alongside the divergence in price trends, the gold-to-silver ratio also rapidly declined from 81.51 at the beginning of October to 58.44 by the end of the year, as shown in the chart below.
Copper Prices: Policy Arbitrage and Supply-Demand Imbalance Drive Structural Uptrend
Similar to silver, copper prices also experienced a significant rise in 2025, with London copper prices increasing over 40% year-to-date, currently trading at $12,575.0 per ton; US copper also rose nearly 42%, now quoted at $5.7085 per pound. The rise in copper prices may be attributed to policy-driven inventory shifts, uncertainties on the supply side, and structural growth in demand.
Expectations regarding tariff policies from the Trump administration became a key variable disrupting the copper market landscape. In 2025, the US government repeatedly signaled its intention to impose tariffs on copper, announcing in July a new 50% tariff on all imported copper (later excluding refined copper) and in November listing copper as a critical mineral, triggering market concerns about future trade restrictions. To avoid tariff risks, importers rushed to ship copper into the United States, creating significant arbitrage opportunities—buying relatively cheaper London copper and selling it in the higher-priced US market.
As shown in the chart below, when Trump announced tariffs on imported copper in early July, copper prices began to soar. However, by the end of July, the policy was adjusted to apply only to copper materials rather than refined copper, causing copper prices to quickly retreat. Subsequently, expectations of potential increases in trade barriers kept copper prices rising.
This policy-driven inventory shift directly caused regional supply-demand imbalances: inventories in US COMEX warehouses accumulated rapidly, keeping North American spot prices firm, while copper reserves in London LME warehouses continued to decline, intensifying the tightness in European and Asian spot markets. The shift of inventories from a 'global distribution' to 'regional concentration' not only amplified perceptions of supply shortages but also pushed up near-month contract prices and premium levels, becoming an important driver of the rise in copper prices.
Uncertainty on the supply side has further exacerbated the tense situation in the copper market. Significant accidents at major global copper mines have directly impacted the global copper supply; meanwhile, potential supply risks (such as policy changes and labor disputes) persist in key copper-producing countries like Chile and Peru. Coupled with expectations that the Trump administration might reintroduce tariffs, these factors have heightened concerns about supply in the market.
Structural growth in demand has provided long-term support for copper prices. Copper is widely used in electrification technologies, and as the global energy transition progresses, copper demand in the renewable energy sector continues to expand. Additionally, increased capital expenditures on data centers and AI infrastructure have also contributed to sustained incremental demand for copper procurement.
Oil Prices: Dual Pressures from Supply and Demand Lead to a Yearlong Downward Trend
In sharp contrast to the strong performance of precious metals and copper prices, international oil prices entered a prolonged adjustment phase in 2025, becoming the 'laggard' in the commodities market.
$Brent Last Day Financial Futures (MAR6) (BZmain.US)$The price has continuously declined from $74.484 per barrel at the beginning of the year to around $61.469 per barrel currently, representing a cumulative drop of 17.47%. The dual pressures of oversupply and weak demand are the core reasons for the decline in oil prices.
Persistent oversupply has been the main driver behind the fall in oil prices. In 2025, OPEC+'s production cut policy underwent a significant shift, specifically marked by three consecutive months of production increases totaling 411,000 barrels per day from May to July, followed by further expansions in production scale between July and August. By September, it was announced that the group would gradually phase out the previous voluntary additional production cuts of 1.65 million barrels per day, leading to a progressively looser global crude oil supply environment.
Meanwhile, Russian crude oil supplies have not been significantly affected by the United States. In an effort to capture market share, Russia has aggressively discounted its crude oil sales. By mid-December, the price of Urals crude was trading at a $35-per-barrel discount to Brent crude, marking the largest discount since 2022 and further pressuring international oil prices.
Weakness on the demand side has left oil prices lacking upward momentum. In November 2025, apparent demand for U.S. petroleum products registered a year-on-year growth rate of -0.3%, reflecting overall sluggish crude oil demand across the Northern Hemisphere, which has struggled to absorb the increase in supply.
Despite current oil prices having reached the cost line for some shale oil companies, market expectations suggest that reductions in upstream capital expenditures may provide some support for oil prices. Moreover, supply risks from countries such as Venezuela remain, potentially stabilizing downward trends in oil prices in the short term.
Stock Market Dynamics: Metal Stocks Soar, Oil Stocks Under Pressure Amid Divergence
The divergence in commodity prices has directly impacted related sectors in the stock market.
In the Hong Kong stock market, metal and mining stocks have become one of the top-performing sectors this year due to the surge in gold, silver, and copper prices. Among them,$ZIJIN MINING (02899.HK)$Zijin Mining has stood out significantly: driven by its dual business model centered on gold and copper, its share price has surged nearly 156% year-to-date, making it the second-best performer among Hang Seng Index constituents; the top performer is an aluminum industry chain company,$CHINAHONGQIAO (01378.HK)$with a cumulative gain of 196%, while aluminum prices have risen 16.38% year-to-date.
$JIANGXI COPPER (00358.HK)$Another company, leveraging its competitive edge in silver byproducts from copper smelting, has benefited doubly from rising copper prices and premium silver prices, with its H-shares surging 250% year-to-date.
In the international oil sector, shares of oil companies have faced pressure due to the continuous decline in oil prices. Buffett's favored stock,$Occidental Petroleum (OXY.US)$Occidental Petroleum, along with other traditional oil firms, has seen heightened volatility in its share price this year, with a cumulative decline of 16.41%, significantly underperforming the broader market.
Conclusion: Between Exuberance and Rationality
The 'tale of two extremes' in the commodities market in 2025 is far more than a simple supply-and-demand story—it is a grand narrative that reveals the intricate complexities of modern financial dynamics. Compared to the broad-based rally earlier in the year driven by risk aversion and central bank gold purchases, the market landscape at year-end has undergone significant divergence. Speculative capital’s sentiment and willpower are now overshadowing fundamentals in certain areas, planting the seeds for heightened volatility in the coming year.
$XAG/USD (XAGUSD.FX)$It is the most dazzling yet perilous star of 2025. While its rise of over 161% has been supported by industrial demand and inventory, the core force driving its recent epic volatility is undoubtedly the overwhelming tide of speculation. Unlike the gold market, which is deeply rooted with physical reserves held by central banks around the world, the silver market is inherently 'shallow'—with smaller trading volumes and weaker inventory buffers. This structural fragility makes it a perfect target for speculative capital.
In comparison,$XAU/USD (XAUUSD.CFD)$Its stage is much more stable. Its rise has been supported by the relentless purchase of gold by global central banks, continuous inflows into large ETFs, and long-term concerns among high-net-worth investors about the credibility of fiat currencies. This is a market dominated by institutions and strategic funds, where depth and liquidity provide it with greater resilience. Despite being at historical highs, the driving logic behind it—global geopolitical conflicts, debt monetization, and the trend of 'de-dollarization'—shows no signs of weakening in 2026. Gold serves as the 'anchor' of wealth in turbulent times; while volatility exists, the foundation of its trend may be difficult to shake through short-term speculation.
In the oil and copper markets, we see a more complex game between expectations and reality. The weakness in crude oil is the direct result of two real forces: OPEC+ production increases and sluggish global economic growth. Its future may hinge on whether major economies, represented by China, can truly ignite the engine of demand through effective domestic stimulus—a game awaiting the 'east wind.' The story of copper, however, is more subtle, perfectly illustrating how expectations create reality: fears of tariffs have driven cross-ocean inventory shifts, artificially creating regional shortages that first pushed prices higher on the financial side.
Thus, the most important lesson the 2025 market leaves for 2026 is the ability to distinguish between 'trends' and 'noise.' The frenzy in silver is the 'noise' of extreme capital sentiment, with its intense volatility itself being the greatest risk. The steadiness of gold, on the other hand, stems from the core 'trend' of this turbulent era. As for crude oil and copper, they stand at a crossroads, waiting for macro policies and industrial demand 'realities' to validate current prices.
For investors, in the coming year, perhaps more respect for silver, patience for gold, and keen observation of the pulse of economic recovery are needed. Because when the drumbeat of speculators stops, only real supply and demand will determine the ultimate value destination.
Editor/melody
