Making sense of market moves
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We get it—cryptocurrency, stocks, and even boring old bonds are all hogging the spotlight right now.
But the best under-the-radar play for the upcoming year might not be any of those.
Commodities may be understated, but these oft-forgotten assets have quietly become some of the best performers of the year. And pros say they could be particularly smart picks going forward, especially if Trump’s tariffs trigger another wave of inflation.
Hot commodities
2024 has been gold’s golden era: The shiny metal is up 27% year-to-date, outpacing the S&P 500’s 25% gain.
And some, notably investment analyst Cam Hui, believe that, based on technical analysis, gold could beat stocks again in 2025.
Morgan Stanley had a different take on the precious metal bandwagon. Strategist Serena Tang argued in the firm’s recent 2025 Global Strategy Outlook that a less-popular, but more-useful commodity had the biggest upside.
“Copper is our top pick due to demand recovering with lower prices,” Tang wrote. Despite the fact that copper is also used for renewable energy tech and AI hardware, it's only up about 8% this year so far, making it an attractive bargain when compared to gold’s gains.
The pros think that silver will also continue enjoying strong gains. Like copper, silver has a role in constructing tech, including AI hardware—which if you didn’t know was lucrative yet, where have you been for the last two years?
Agriculture commodities corn and wheat may also have room to run next year, especially because their prices are currently at multi-year lows. Wheat in particular may be ready to run higher thanks to rising global demand.
On the other hand, oil futures are in the red this year so far as well, largely due to slowing demand for energy in China. Some analysts say that the downturn could continue.
“Our oil strategist continues to argue that the oil market appears to be heading for a sizeable surplus in 2025, driven by a combination of (1) decelerating oil demand growth, (2) still-robust non- OPEC supply growth, and (3) OPEC's ambition to start growing supply as well,” wrote Morgan Stanley equity analyst Daniel Katz in a note today.
If you don’t feel like keeping gold bars under your bed, the easiest way to get exposure to commodities is through ETFs. Consider funds that offer broad investments across the commodities market, such as the Invesco DB Commodity Index (DBC), or funds that track specific assets, such as the SPDR Gold Trust (GLD), or the United States Copper Index Fund (CPER).—LB