News

Key points in this update:

• Growing uncertainty about the global economic outlook has been felt across the commodities market, where different sectors have responded in varying ways.
• Despite economic risks, the commodities sector has emerged as one of the best-performing asset classes in 2025.
• While coffee and sugar recorded strong gains, performances were relatively muted across other sectors, with end-of-week profit-taking reducing earlier strong gains.
• Led by a silver and platinum slump, gold traded lower, with profit-taking emerging ahead of a multi-year technical resistance level.

Growing uncertainty about the global economic outlook, including inflation trends and political developments, has prompted several major central banks to strike a cautious tone in their latest policy meetings. Of the five central banks that convened to decide on interest rates this past week, only the Swiss National Bank opted to lower rates, reflecting concerns about sluggish growth and subdued inflation. Meanwhile, traders anticipate further rate cuts in both the US and the UK later this year, while Japan remains on a tightening path as inflation has surpassed the Bank of Japan’s 2% target for the 35th consecutive month.

In the US, the Federal Reserve maintained its benchmark interest rate for the third consecutive meeting, keeping its forecast for two rate cuts in 2025 unchanged. However, Fed Chair Powell cautioned that economic uncertainty remains “unusually elevated,” largely due to President Trump’s aggressive trade policies, including sweeping import tariffs. These measures, intended to support domestic manufacturing by making foreign goods more expensive, have instead contributed to inflationary pressures and a slowing economy, raising growth concerns.

Overall, the Bloomberg Commodities Total Return Index (BCOMTR) traded higher for a third week, but apart from softs where coffee and sugar recorded strong gains, performances were relatively muted across other sectors with end-of-week profit-taking reducing earlier strong gains, especially across the precious metal sectors lead by a slump in silver. The index, as mentioned, trades up around 8% on the year, thereby cementing its position as one of the best-performing asset classes in 2025. Except for grains, which have suffered a rush of speculative long liquidation worsened by uncertainty over what will happen with tariffs after 2 April, all sectors trade up on the year with standout performances from precious and industrial metals as well as the softs sector.

On an individual level, the top five contracts are natural gas (+30%), HG copper and Arabica coffee both on 25%, followed by silver and gold, both up around 14%. At the bottom, we find cocoa (-33%) and EU gas (-12%), two contracts that are not included in the BCOMTR Index, while smaller losses have been recorded in crude and fuel as well as cotton.

Sugar’s roller-coaster ride leaves traders with a bitter taste

The most active raw sugar futures contract in New York has rallied back to 20 cents per pound, a level it traded at three weeks ago, before witnessing a sudden 10% correction, partly driven by wrong-footed speculators who have struggled to deal with the roller-coaster ride the sweetener has been on since December. Including the positive roll yield from a backwardated forward curve, the contract trades up around 13% so far this year, and together with a 27% increase in Arabica coffee, they have supported a strong quarter for the Bloomberg Commodity Softs TR Index, which currently trades up around 15%, a performance that has only been eclipsed by precious metals. The latest rebound is being supported by the prospect of tightening fundamentals with concerns emerging about export levels from Brazil and India, the world’s top growers. Production estimates in Brazil are being lowered following a period of dry weather, while lower cane yields in some key growing areas in India may challenge its capacity to keep exports going. In addition, shipments of sugar to the US from Mexico are expected to fall to a 17-year low this year, with exports being challenged by lower production following an extended period of drought and now also the risk of a 25% tariff on goods otherwise covered under the North American trade agreement.

Silver-led profit-taking weighing on gold

Gold reached a fresh record high above USD 3,050 an ounce before some end-of-week profit-taking, led by silver and platinum, helped trigger another, so far shallow, correction. The recent rally has pushed the price of a standard 400-ounce (12.4 kg) gold bar—held by central banks globally—above USD 1,200,000, a tenfold increase since the start of the 21st century. Beyond reinforcing gold’s status as a long-term buy-and-hold asset, this surge reflects growing global instability, which has fuelled strong demand for safe havens like gold and, to some extent, also silver.

Since the November 2022 low, gold has rallied by around 80%—a phenomenal performance by an asset often criticised by Warren Buffett, famously calling it an unproductive asset, with his argument being that gold does not generate income, unlike stocks, bonds, or real estate, which can produce dividends, interest, or rental income.

While managed money accounts have been net sellers during the past seven weeks, reducing their net long by 5.2 million ounces to 18.2 million, potentially signalling a short-term peak, asset managers and other more long-term-focused investors have increased total holdings across exchange-traded funds by 2.9 million ounces to 86.2 million—still a far cry from the pre-US rate hike peak at 106.8 million ounces—highlighting plenty of room for additional demand should the underlying trends continue to support. Read more in our latest gold update here.

Technical analysis suggests that gold’s short-term peak is around USD 3,100, potentially followed by a period of consolidation before a renewed attempt toward our year-end target of USD 3,300 per ounce. After three failed attempts, last year’s breakout above USD 2,074 confirmed the completion of a cup and handle formation, developed over a 13-year period (2011–2024). Using the distance from the cup’s bottom (large box) to the handle’s top (small box), the technical target is USD 3,100.

Copper increasingly exposed to a binary tariffs event

The New York-traded High Grade copper futures reached a record closing high on Thursday at USD 5.1120 a pound, marking a culmination of a month-long surge that has triggered a major dislocation between US prices and the rest of the world. A development driven, not by strong fundamental demand, but mostly by a phenomenal arbitrage window that has been opened due to Trump’s push for tariffs on imports of the metal.

Ahead of a potential announcement of tariffs, a decision that could still be months away given the time an investigation carried out under Section 232 of the Trade Expansion Act normally takes, traders have been rushing copper to the US in order to log in premiums of up to 13% relative to prices in London, a move that has helped tighten the rest of the world where more than 90% of global demand is consumed. It’s worth noting that holding a high-grade futures position at a 13% premium to London has raised binary risks in the market, meaning prices could suddenly drop by more than 10% if no tariffs are introduced or surge even higher if the level is 25%, in line with those applied on steel and aluminum.

Crude oil: Range-bound despite growth concerns

Crude prices have settled into a relatively tight range near the recent lows, weighed down by fears Trump’s aggressive trade policies may trigger a global trade war that would negatively impact global growth and demand. In addition, the prospect of rising supply from OPEC+ next month has also been weighing on prices at a time when the US administration has been talking down oil prices, potentially, if successful, scoring a major own goal.

We believe these concerns are overstated, not least considering the risk of lower output due to sanctions and several of the OPEC+ members having pledged additional cutbacks to compensate for exceeding quotas, a move that if carried out would offset the planned increase. Iran is once again in the crosshairs of the US administration after Treasury Secretary Scott Bessent recently said the US would ramp up sanctions on Iran, a producer that despite sanctions in the past four years managed to increase production by around 1.1 million barrels a day. A clear sign of that threat was seen this week when the US penalised a Chinese refinery and its CEO for allegedly buying Iranian oil.

With this in mind, we see no major change in OPEC+ production in the coming months, instead a redistribution among its members with GCC producers being the main winners, allowing them to increase production without hurting prices. In addition, it has become increasingly clear that Trump’s “Drill, baby, drill” cannot be achieved without hurting output from high-cost producers, many of which are located in the US, and production growth will likely slow, thereby supporting prices while handing market share back to OPEC.

Recent commodity articles:

19 Mch 2025: Has the gold express already left the station? 17 Mch 2025: COT Report: Silver and copper stands out in week of energy weakness 14 Mch 2025: Gold surges past USD 3,000 as haven demand grows 12 Mch 2025: Tariffs and the energy transition: Key drivers of copper demand 11 Mch 2025: Gold holds steady despite deleveraging risks in volatile markets 10 Mch 2025: COT Report: Wholesale reductions in speculators' USD and commodity longs 7 Mch 2025: Commodities Weekly: Tariffs, trade tensions, fiscal bazooka, and Ukraine 5 Mch 2025: Tariff threat disconnects HG copper from global market 4 Mch 2025: Stagflation and geopolitical tensions fuel renewed demand for gold 3 Mch 2025: COT Report: Broad retreat sees WTI longs slump to 15-year low 28 Feb 2025: Commodities weekly: Broad weakness as tariff fatigue sets in 24 Feb 2025: COT Report: traders turn selective despite ongoing broad rally 21 Feb 2025: Commodities weekly: energy market strength and Trump rethoric fuel surge 18 Feb 2025: COT report: crude, gold and grains see mild profit taking 5 Feb 2025: Broad Strength Drives Commodities sector to 26-month High 4 Feb 2025: Crude Oil Wipes Out 2025 Gains as Tariffs and Demand Weighs 3 Feb 2025: COT Report: Mixed Week Seen Ahead of Trump's Tariff Offensive 1 Feb 2025: YouTube: Joining Kevin Muir on The Market Huddle podcast Podcasts that include commodities focus: 18 Mch 2025: US market found support, but how durable will it be? 14 Mch 2025: Is silver set to shoot the lights out? 10 Mch 2025: US un-exceptionalism is the theme 7 Mch 2025: US bear market risks ratchet higher. EUR train has left the station 4 March 2025: Are we on the verge of a big whoosh? 25 Feb 2025: Meltdown risks are rising. What to watch next 18 Feb 2025: Europe is on fire 5 Feb 2025: Mag 7 risks underappreciated?  3 Feb 2025: If new Trump tariffs stick, markets have only just begun to react 31 Jan 2025: Does the market think Trump is bluffing? 29 Jan 2025: The DeepSeek winners emerge 27 Jan 2025: DeepSeeking missile strikes global markets 24 Jan 2025: Four days in, Trump continues to dominate headlines, but ... 20 Jan 2025: Trump 2.0 swings into action 17 Jan 2025: Brace for Monday, as a new era begins

Key points:

• Volatility is normal—think long-term. Checking your portfolio daily fuels anxiety, but history shows that long-term investors always come out ahead. The S&P 500 has never delivered a negative 15-year return since World War Two.
• Diversification and discipline are your best defense. A well-balanced portfolio helps cushion downturns, while sticking to your strategy prevents costly emotional decisions.
• Consistency and low costs drive success. Regular investing and minimizing fees maximize your long-term returns—even in uncertain markets.

Let’s be honest—investing isn’t particularly easy (or fun) right now. The market is all over the place. One day, stocks are up on optimism. The next, they’re down because of a new round of tariffs or fears of an economic slowdown. The S&P 500 is swinging wildly, and the “Magnificent 7”—Tesla, Nvidia, Alphabet, Meta, Amazon, Apple, and Microsoft—have collectively lost over USD 1.5 trillion in market value in just a few months. It’s no wonder investors are feeling nervous. But here’s the thing: market volatility isn’t a bug—it’s a feature. Since 1949, nearly half of all daily market returns have been negative. If you check your portfolio every day, you’re going to see a lot of red. But zoom out, and the picture changes completely. Over a 15-year period, the S&P 500 has never delivered a negative return—not once. The market rewards patience and discipline. It punishes panic and short-term thinking. So if you’re feeling the urge to sell everything and sit in cash, stop. Now is the time to focus on what really matters: the long game. The most successful investors aren’t the ones who predict the next crash. They’re the ones who stick to a strategy and stay in the game. And to do that, you need to build on four time-tested pillars of investment that will help you ride out the storm—and come out stronger on the other side.

Pillar 1. A long-term perspective: Ride out the storms

Short-term market swings can feel brutal. Prices fluctuate wildly based on things like trade policies, interest rates, corporate earnings, and even investor emotions. But zoom out, and you’ll see that over decades, markets tend to go up. Look at what’s happening right now: The market is down due to uncertainty around tariffs and a potential recession. But we’ve been here before. Trade wars. Recessions. Wars. Banking crises. Pandemics. Political instability. The market has faced it all—and still, long-term investors who stayed the course have been rewarded. Think about this for a second: If you check your portfolio every single day, almost half the time, it will show a loss. Over the past 75 years, 46% of all daily returns on the S&P 500 have been negative. That’s enough to make anyone anxious. But here’s where it gets interesting.

If you extend your time horizon to one month, the percentage of negative periods drops to 39%. Over one year, negative returns happen only 26% of the time. Over five years, that number shrinks to just 15%. At ten years, markets have been positive a staggering 93% of the time. And here’s the kicker: Over a 15-year period, the S&P 500 has never delivered a negative return. Not once since World War II. Let’s take a moment to reflect on that. The key? Stop obsessing over short-term movements. If you’re investing for retirement, your kids’ education, or long-term wealth, what happens this week or even this year shouldn’t matter. What could you do? Resist the urge to check your portfolio daily—it only fuels anxiety. Think in decades, not days.

Pillar 2. Diversification: your portfolio’s shock absorber

Of course, holding investments for the long term only works if you can stomach the volatility. That’s where diversification comes in—it’s your portfolio’s shock absorber. Take the technology sector, for example. The “Magnificent 7” tech stocks have taken a massive hit in 2025, shedding over USD 1.5 trillion in market value. If your portfolio was heavily concentrated in tech, you’re feeling the pain right now. But if you had a mix of stocks, bonds, and international investments, the impact would have been far less severe.

“A well-diversified portfolio reduces risk while still capturing growth. You might not always hit home runs, but you won’t strike out completely, either.”

What could you do? Review your portfolio. If you’re overly concentrated in one stock, one sector, or one country, consider rebalancing. Diversification helps you survive the downturns and thrive in the recoveries.

Pillar 3. Discipline: follow your strategy, not your emotions

Markets go up and down. That’s just reality. But if you let fear and greed dictate your decisions, your portfolio will suffer. Right now, investors are worried about tariffs, interest rates, and a potential recession. They’re wondering if they should sell and move into cash. But history shows that emotional decisions almost always lead to regret. When stocks are soaring, people get greedy. They chase hot stocks at inflated prices. When markets crash, fear takes over. Investors panic and sell at the worst possible time. This emotional cycle destroys returns. The best investors? They stay disciplined. They don’t try to time the market. They don’t jump from strategy to strategy. They have a plan and stick to it—no matter what the headlines say.

“Think of investing like planting a tree. You don’t dig it up and replant it every time the weather changes. You let it grow.”

What could you do? Create a simple rule: Only review your portfolio quarterly—not daily. Set clear, pre-defined rules for when and why you’d make changes. If your financial goals and risk tolerance haven’t changed, neither should your strategy.

Pillar 4. Consistency & cost efficiency: small tweaks, big impact

Investing isn’t just about picking the right assets—it’s also about how you invest. Two things make a massive difference over time: regular investing and low costs. First, let’s talk about consistency. The smartest way to handle market ups and downs? Dollar-cost averaging—investing a fixed amount at regular intervals, no matter what the market is doing. This strategy removes emotion from the equation and ensures you buy more when prices are low and less when they’re high. Now, let’s talk about costs. A fund with a 1.5% annual fee might not seem like much, but over 30 years, it can cost you hundreds of thousands in lost returns. Similarly, high transaction costs and hidden fees will over time be a significant drag on your returns. High fees are silent wealth killers. The less you pay in fees, the more you keep for yourself. So what could you do? Set up automated investments like AutoInvest to remove decision-making stress. Also, check the fees you’re paying—if you’re in high-cost funds, consider switching to lower-cost alternatives.

Final thoughts: will you panic… or prosper?

The market is volatile right now. Tariffs, recession fears, and rate uncertainty are rattling investors. But long-term investing success isn’t about avoiding downturns—it’s about managing them wisely. When the next market crash comes—and it will—ask yourself:

• Will you panic-sell at the bottom, or will you stay invested and ride the recovery?
• Will you chase hot stocks at their peak, or will you stick to your plan?
• Will you obsess over daily market moves, or will you think in decades?

The best investors aren’t the smartest or the luckiest. They’re the ones who stay in the game. The market rewards patience. It punishes impulsive decisions. Which kind of investor will you be?Fortunes aren’t made by predicting the next crash. They’re made by staying invested through all of them.