Gold Soars as ING Predicts 2025 Commodity Market Challenges and US-China Trade Tensions
The global commodity market is bracing for a turbulent 2025, but one asset is expected to shine: gold. ING Group NV, a major financial institution, has released a forecast predicting a bullish outlook for the precious metal amidst growing concerns about US-China trade tensions. This projection comes as a stark contrast to the overall anticipated challenges facing various commodity sectors.
According to a Bloomberg report, ING anticipates a difficult year for commodities in 2025, largely attributed to the potential for escalating trade conflicts between the United States and China. President-elect Donald Trump’s proposed tariffs pose a significant threat to market stability, impacting sectors ranging from oil and metals to agriculture. Further complicating the picture, China’s stimulus measures remain under scrutiny, creating uncertainty surrounding future consumption levels.
ING analysts Warren Patterson and Ewa Manthey highlight a potential downward pressure on the broader commodity sector due to a predicted balance between supply and demand. However, this seemingly bearish market outlook is significantly offset by their strikingly positive prediction for gold. Their forecast points to gold prices averaging a remarkable $2,760 an ounce in 2025, continuing its record-breaking trend. This surge is expected to be fueled primarily by increased demand from central banks actively diversifying their reserves in response to heightened geopolitical uncertainties.
The industrial metals sector presents a more uncertain picture. Trade policies and fluctuating Chinese demand will be key determinants of price movements. ING projects copper to average $8,900 a ton, but the overall outlook remains clouded by the unpredictable nature of global trade relations. Similarly, grains and soft commodities are predicted to experience significant volatility due to the combined effects of trade disputes and unpredictable weather patterns.
This bullish gold forecast aligns with earlier predictions from JPMorgan, who also anticipated significant gains for both Bitcoin and gold following Trump’s presidential win. This prediction is rooted in the concept of a “debasement trade,” where investors seek refuge in assets like gold and Bitcoin as a hedge against potential currency devaluation. While JPMorgan’s Commodities Research team acknowledged recent gold market fluctuations as a mere “stumble, not a sea change” following Trump’s re-election, the long-term outlook remains positive.
Despite the appeal of alternative assets like Bitcoin, advocated for by prominent figures such as Michael Saylor, gold’s enduring status as a safe-haven asset remains a critical factor. In a world grappling with geopolitical uncertainty and potential economic instability, investors are increasingly likely to turn to gold as a reliable store of value.
The market has already started to react to these predictions. According to Benzinga Pro, Gold ETFs have seen a significant upward tick following Trump’s 2024 election win. The SPDR Gold Trust (GLD) increased by 4.54%, while the iShares Gold Trust (IAU) rose by 4.52%. Further evidence of this trend is reflected in the VanEck Gold Miners ETF (GDX), which saw an 8.25% rise in the past month, and the VanEck Junior Gold Miners ETF (GDXJ), which experienced a substantial 10.57% increase. These figures underline the growing investor confidence in gold as a resilient investment in times of global uncertainty. The upcoming year promises to be a fascinating period for commodity markets, with gold positioned to potentially lead the way.
