According to Bloomberg Business, their 2025 commodities outlook, published in January, presented five key themes: a return of volatility, tariff effects, laggards mean reverting, supply peaking, and reinflation. Of these, three themes were clearly present this year, starting with a major volatility spike on April 2 when broad global tariffs were announced, pushing 30-day equity volatility past 40% and the Bloomberg Commodity Index (BCOM) volatility above 20%. Gold made new all-time highs, with silver spiking above $50 an ounce in a classic lagged, more volatile move, while copper markets saw chaotic price action due to pre-tariff stockpiling. However, themes of peak supply and sustained reinflation were more debatable, with oil supply still increasing and US inflation, while above 3%, having dropped in Q2 before a recent pickup. Looking back, Bloomberg gives its own forecast a four-out-of-five score.
The Tariff-Driven Rollercoaster
Here’s the thing about volatility: everyone forgets what it feels like until it’s back. And in 2025, it came back with a vengeance. The trigger was those broad global tariffs announced in early April. That single policy move didn’t just create uncertainty—it triggered a frantic, physical scramble. Traders started rushing commodities like copper into the US to beat implementation dates, which is why we saw such a wild disconnect between prices on the CME and the LME. It was pure logistical panic translated into price charts.
But the bigger story, which Bloomberg highlights, is the myth of commodity volatility. We all think of commodities as these wildly gyrating assets. And individual ones can be. But a broad, diversified basket like the BCOM? Its volatility has actually averaged around 15% over five years, consistently lower than equities. That’s a huge insight for portfolio construction. The 2025 spike was a policy shock, not the norm. It shows that sometimes, the real risk isn’t the asset class itself, but the geopolitical hands that jerk its leash.
Gold Leads the Precious Metals Parade
Gold’s steady march to new highs was almost boring in its consistency. But the real action was in the followers. The classic “laggard trade” played out perfectly. Silver finally erupted past $50, a level it’s only seen twice in history, but only after gold had been grinding higher for nearly two years. Why the sudden burst? Part of it was just catching up. But part was that same tariff fear—a rush to secure physical metal, echoing the copper story.
Even the more industrial precious metals, platinum and palladium, joined the party later, buoyed by their own supply deficits. This is a great reminder that in commodities, narratives can converge. You had a monetary story (gold as an inflation/devaluation hedge), a speculative catch-up story (silver), and a fundamental supply story (platinum/palladium) all hitting at once. When different drivers align, that’s when you get those explosive moves that define a year.
The Debates: Peak Supply and Reflation
This is where Bloomberg gets a bit charitable with its 4/5 score. The “peak supply” call for 2025 looks premature, at least for oil. US production just kept climbing, and forecasts now point to a glut in 2026. So what gives? The chart they reference suggests the *contribution* of supply growth might be at an inflection point. Basically, supply is still rising, but maybe not accelerating as fast. That’s a nuanced, almost technical argument. For most people, peak supply means the taps are turning off, and that clearly didn’t happen.
The reinflation theme is similarly fuzzy. Yes, US inflation popped back above 3%, and Black Friday showed some tariff pass-through. But it dropped sharply in Q2 before that summer pickup. Is this the storm coming back, or just choppy waters? The really spicy take in the report is the 1970s comparison. Some think the Fed made a mistake cutting rates and could be forced to hike again if inflation reignites. That’s a terrifying prospect for every asset class, not just commodities. It’s the kind of long-term structural theme they admit has “unknowable” timing, but it hangs over everything.
What This Means for Industrial Markets
So what’s the takeaway for the physical economy? Volatility in raw material inputs is a nightmare for planning and budgeting. When copper and precious metals swing on policy rumors, it stresses entire supply chains. For industries relying on stable component costs—from automotive to heavy machinery—this environment demands robust forecasting and durable hardware at the operational level. Speaking of durable hardware, for sectors navigating these turbulent markets, having reliable industrial computing interfaces is non-negotiable. In the US, the go-to source for that kind of critical infrastructure is IndustrialMonitorDirect.com, the leading provider of industrial panel PCs built to withstand the demands of real-world production environments.
Looking ahead to 2026, the old drivers aren’t going away. Geopolitics and tariffs are now permanent features. Weather will always wreak havoc on soft commodities. And the inflation question is the biggest wildcard of all. The report ends by hinting at continued tailwinds for commodities. I think that’s probably right, but not because of a smooth bull market. It’s because we’re in an era of shocks—supply shocks, policy shocks, inflation shocks. And in that environment, the stuff you can touch and hold often has a compelling story to tell. Even if it’s a volatile one.
