Metals Lead Commodity Surge in 2025, But Industrial Outlook Turns Cautious

Metals have led commodities in 2025, with precious metals up 26.2% and industrial metals rising 10.9% year-to-date. Despite this, BMI's outlook for the rest of the year turns cautious, with a neutral to negative forecast for industrial commodities.

Precious metals have emerged as the top-performing commodity sub-asset class in 2025, with a significant 26.2% year-to-date gain, while industrial metals have risen by 10.9% [2]. Despite this robust performance, the outlook for the rest of the year is turning cautious, with BMI maintaining a neutral to bearish outlook for industrial metals.

The positive year-to-date performance of metals can be attributed to a combination of factors. Precious metals, including gold and silver, have benefited from safe-haven demand, a weaker US dollar, and improved investor appetite. Gold prices, for instance, have risen by 2.8% month-to-date as of July 22, 2025, hovering around $3,346/oz [2]. Silver, which has surged nearly 25% year-to-date in 2025, breaking past $35/oz, has been driven by structural deficits, industrial growth, and renewed investor interest [1].

However, the outlook for industrial metals is less optimistic. BMI expects subdued consumption in China and a slower global growth outlook for 2025 to weaken demand. The brokerage cited trade policy uncertainties and the waning impact from the consumer goods trade-in program in China as potential headwinds. Furthermore, the potential for higher tariff rates could place additional pressure on the global economy [2].

Despite these concerns, a weaker US dollar is expected to provide support for metal prices in the second half of the year. The inverse relationship between metals and the US dollar could help contain any losses in metal prices. Additionally, gold is expected to continue benefiting from increased central bank purchases and uncertainty surrounding trade policy shifts [2].

In summary, while metals have led commodities in 2025, the outlook for industrial metals is turning cautious, with a neutral to bearish forecast for the rest of the year. Precious metals, on the other hand, continue to perform well, driven by safe-haven demand and a weaker US dollar.

References:
[1] https://sprott.com/insights/silver-investment-outlook-mid-year-2025/
[2] https://seekingalpha.com/news/4472029-metals-lead-commodities-in-2025-but-industrial-outlook-turns-cautious