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Market Overview:

The commodity markets are back in the spotlight this week, but for all the wrong reasons — we’re seeing rising volatility, massive divergence across sectors, and a growing tug-of-war between macro pessimism and commodity-specific fundamentals.

Gold continues to hold firm above $2,400, showing remarkable resilience even after last week’s soft inflation print in the U.S. and a hawkish tone from Fed speakers. Investors aren’t buying the “soft landing” narrative anymore — with U.S. debt auctions faltering, geopolitical instability heating up (Taiwan, Red Sea, Ukraine), and political risk rising ahead of the U.S. election, capital is flowing toward hard assets. Central bank gold demand hasn’t slowed down either. The market smells something rotten in the global financial system, and gold is still the cleanest hedge.

Cocoa, on the other hand, is correcting — fast. After a historic run to over $11,000/ton earlier this spring, prices have tumbled over 30% in just a few weeks. Some of that is technical — overbought conditions unwinding — but there's also real supply relief coming in. Nigerian output surprised to the upside, and mid-crop forecasts in Ivory Coast are no longer as bleak as feared. The rally may have gotten ahead of itself, and speculative froth is now being squeezed out.

Copper is consolidating near the $10,000/ton mark after a powerful multi-month rally. The bull thesis — tight inventories, strong electrification demand, and trade war positioning — is still intact, but there’s fatigue setting in. China’s import appetite has cooled slightly, and traders are now waiting to see if U.S. tariffs on Chinese EVs and tech escalate into broader industrial retaliation. Still, any supply hiccup could light the fuse again, and bulls are watching Chile’s and Peru’s output numbers very closely.

Crude oil is looking weak. Brent fell back below $80 this week despite geopolitical flare-ups, and the curve is slipping deeper into contango — a bearish signal. OPEC+ is trying to hold the line with production management, but internal tensions are growing. Russia is overproducing again, and compliance from smaller members is slipping. Meanwhile, U.S. inventories are rising, and the anticipated summer demand bump hasn’t really shown up. Gasoline demand data in the U.S. was disappointing, and jet fuel usage remains soft. This is not the demand recovery OPEC was hoping for.

Natural gas is perking up. Henry Hub prices are climbing back toward $3/MMBtu, with European TTF prices also firming amid ongoing disruptions. The big story here is global LNG — new export capacity is finally coming online, and Asian demand looks stronger heading into summer. There’s also a growing risk premium from geopolitical instability and weather volatility. If we get a hot summer and any LNG outage, gas could squeeze hard.

Grains are in a tug-of-war. Corn and wheat are seeing some bullish momentum after weeks of stagnation, thanks to dry weather in parts of the U.S. Midwest and Ukraine logistics bottlenecks. But the macro pressure from tariffs is still there — China just slapped a fresh round of duties on U.S. corn, and Mexico is pushing back on U.S. GMO shipments. Soybeans remain the weakest of the bunch, with record Brazilian output continuing to weigh on global supply balances. Until we get a major weather event or a surprise from USDA reports, these markets may stay stuck in chop mode.

Overall, this is a market gripped by uncertainty. Macro headwinds are rising — interest rates, political instability, trade friction — but pockets of strength still exist where fundamentals are truly tight. The key is to stay nimble. We’re not in a macro-driven bull cycle anymore; we’re in a battlefield of narratives, driven by real-time data, weather maps, and policy surprises. Expect sharp reversals, violent short squeezes, and high correlation between headlines and price action. This is still a trader’s market. Pick your spots and keep stops tight.

Gold's Resilience Amid Economic Turmoil

Gold continues to assert its role as a safe-haven asset, with prices maintaining strength despite recent fluctuations.The metal's appeal is bolstered by investor concerns over mounting U.S. debt levels, high bond yields, and geopolitical uncertainties.Notably, Robert Kiyosaki, author of "Rich Dad Poor Dad," has projected a significant increase in gold prices, citing economic instability and a lackluster U.S. bond auction as indicators of potential financial collapse.

Analysts anticipate that gold prices will remain within the $3,050 to $3,250 per ounce range in the second quarter of 2025, reflecting a short-term correction phase.This outlook suggests a period of consolidation before potential further gains, contingent on macroeconomic developments and investor sentiment.

Silver, often considered gold's counterpart, has also experienced upward momentum, reaching $33.66 per ounce.The metal benefits from both safe-haven demand and its industrial applications, particularly in the renewable energy sector.Platinum and palladium have shown mixed movements, with platinum edging down to $1,072.43 and palladium declining to $1,023.50, reflecting varied industrial demand and supply dynamics.

Cocoa's Price Correction

After reaching record highs in 2024, cocoa prices have experienced a notable decline in 2025, dropping over 30% due to improved production forecasts and easing supply concerns.The surge in prices last year was driven by adverse weather conditions and supply disruptions in key producing countries like the Ivory Coast and Ghana.However, increased exports from Nigeria and expectations of higher yields have alleviated fears of a prolonged supply deficit.

Despite the recent downturn, cocoa prices remain elevated compared to historical levels, indicating that the market is still adjusting to the new supply-demand dynamics.Investors should monitor upcoming crop reports and weather patterns in West Africa, as these factors will play a crucial role in determining future price movements.

Copper's Tightrope Between Supply Constraints and Demand Uncertainty

Copper markets are navigating a complex landscape as of May 22, 2025.Prices have shown resilience, with COMEX futures trading around $4.66 per pound, reflecting a 16.5% increase since the beginning of the year . However, recent weeks have seen heightened volatility due to shifting trade policies and macroeconomic factors.

The International Energy Agency (IEA) has raised concerns about a potential 30% shortfall in copper supply by 2035 if current trends persist . This projection underscores the urgency for investment in new mining and refining capacities, as well as the diversification of supply chains.China's dominance in copper refining, accounting for over 70% of global capacity, adds to the market's vulnerability to geopolitical tensions and export restrictions.

On the demand side, the transition to a low-carbon economy continues to drive copper consumption, particularly in electric vehicles and renewable energy infrastructure.However, recent trade policy shifts, including tariffs and export controls, have introduced uncertainties that could dampen demand growth . Additionally, rising inventories in key markets like China suggest a potential easing of immediate supply pressures .

Analysts offer varied forecasts for copper prices.Goldman Sachs projects prices between $5.00 and $5.50 per pound, anticipating a deficit of 180,000 tons in 2025 . In contrast, the International Copper Study Group (ICSG) predicts a surplus of 285,000 metric tons for the year, citing increased mine output . This divergence highlights the market's sensitivity to both supply disruptions and demand fluctuations.

In summary, copper markets are at a crossroads, balancing long-term supply concerns against short-term demand uncertainties.Investors should monitor developments in trade policies, inventory levels, and infrastructure investments to navigate this volatile environment effectively.

Energy Markets:

Crude Oil: Price Pressures Amid OPEC+ Dynamics and Inventory Builds

As of May 22, 2025, crude oil prices have experienced a decline, with Brent crude trading at $64.27 per barrel and WTI at $61.09 per barrel.This downward trend is influenced by discussions within OPEC+ about a potential production increase of 411,000 barrels per day in July, marking a third consecutive monthly hike.The final decision is anticipated at the group's meeting on June 1.

In the United States, crude oil inventories have risen, contributing to market concerns about oversupply.The Energy Information Administration (EIA) reported an increase in crude stockpiles, reflecting higher imports and a slight dip in product demand.

Gasoline prices are also under pressure.The national average for regular-grade gasoline stood at $3.17 per gallon on May 19, 2025, which is 11% lower than the same period last year.This decrease is attributed to falling crude oil prices and ample supply.

Natural Gas: Balancing Rising Demand and Expanding Export Capacity

Natural gas markets are experiencing fluctuations, with the Henry Hub spot price rising to $3.30 per million British thermal units (MMBtu) as of May 21, 2025.This increase reflects growing demand and expectations of tighter supply-demand balances in the coming months.

On the international front, Egypt is in negotiations to purchase 40-60 cargoes of liquefied natural gas (LNG) to address its energy needs.This move underscores the global demand for LNG and the importance of expanding export capacities.

In North America, LNG export capacity is set to grow significantly.Projects like LNG Canada are expected to commence exports in the summer of 2025, contributing to a projected increase of 47 million tonnes per year in global liquefaction capacity.

Overall, the energy markets are navigating a complex landscape of supply adjustments, inventory levels, and evolving demand patterns.Stakeholders are closely monitoring OPEC+ decisions, inventory data, and international developments to inform their strategies in this dynamic environment.

Grains:

As of May 22, 2025, grain markets are experiencing a mix of influences, including trade policy uncertainties, weather conditions, and shifting global demand.

Wheat: Futures are displaying volatility, with Minneapolis spring wheat contracts up 6 to 7 cents early Thursday.The USDA projects a 2025/26 season-average farm price of $5.30 per bushel, down $0.20 from the previous year, attributed to higher stocks and lower projected U.S. corn prices.

Corn: Futures are trading with mixed action, influenced by a rebound in ethanol production, which increased by 43,000 barrels per day to 1.036 million bpd in the week of May 16.Ethanol stocks saw a draw of 501,000 barrels to 24.944 million barrels . The USDA forecasts a season-average corn price of $4.20 per bushel for 2025/26, down 15 cents from the previous year, due to higher ending stocks and lower projected prices.

Soybeans: Futures posted gains of 8 to 12 cents across most contracts on Wednesday, with the cmdtyView Cash Bean price up 10 cents to $10.13 1/2 . However, U.S. soybean exports could decline by 20% if the ongoing trade dispute with China is not resolved, potentially dropping to 1.5 billion bushels from an earlier estimate of 1.865 billion.

In summary, grain markets are navigating a complex environment shaped by trade negotiations, weather patterns, and global demand shifts.Market participants should remain vigilant to these evolving factors.

Upcoming Events to Watch

May 23 – U.S. EIA Weekly Petroleum Status Report​
This weekly update will be pivotal in gauging the direction of crude and gasoline inventories. With OPEC+ debating another production hike and oil prices falling, any unexpected inventory build could weigh further on Brent and WTI. Conversely, a surprise drawdown might provide a short-term floor.

May 28 – U.S. PCE Inflation Data​
As the Fed’s preferred inflation gauge, the Personal Consumption Expenditures index will shape interest rate expectations and heavily influence gold and silver. A hot reading could reignite rate hike fears, while a cool print may confirm that the Fed will stay on pause.

June 1 – OPEC+ Meeting (Vienna)​
The oil cartel is expected to confirm whether it will proceed with a third consecutive monthly production hike of 411,000 barrels/day. Traders will be looking closely at compliance levels and internal rifts, especially as Russian output creeps higher. This meeting could be the key catalyst for crude into summer.

June 4 – ICCO Cocoa Market Report​
With cocoa prices cooling rapidly after their historic rally, all eyes are on the updated mid-crop forecast from West Africa. A better-than-expected harvest in Ghana or Ivory Coast could further unwind bullish sentiment, while fresh supply concerns could reignite the rally.

June 7 – China’s May Trade Data​
Copper, soybeans, and crude will be most sensitive to this release. Imports of raw materials like copper and iron ore will offer key clues into Chinese industrial demand. Any rebound in imports could spark bullish momentum in industrial metals.

Mid-June – U.S. Crop Condition Reports​
As planting season winds down, traders will focus on USDA crop condition reports for corn and soybeans. Any signs of drought stress or delayed planting could introduce weather premium risk into grain markets.

My Personal Take: Why the Oil Market Smells Like Desperation

Everyone’s watching OPEC+, but the signal here isn’t strength — it’s desperation.

A third straight production hike while prices are falling? That’s not how strong cartels behave. That’s how fracturing alliances act when discipline breaks down. Saudi Arabia is pushing output higher to appease both political allies (read: the U.S.) and its own budget needs, while simultaneously watching Russia and others cheat behind the scenes.

The market isn’t buying it. Brent can’t hold $80, and even regional conflicts in the Middle East aren’t generating a sustained risk premium. That tells me the demand picture is worse than people think — particularly in diesel and aviation fuel. The global freight slowdown is real, and consumer travel isn’t offsetting it. The EIA’s rising inventory prints just confirm it.

Here’s what I’m doing: I think Brent has a date with $58–$60 in Q3 unless we see a total U-turn from OPEC+ or a major geopolitical disruption. I’m shorting crude on any rallies back toward $72–74 with stops tight above $76. U.S. shale hasn’t even blinked yet — breakevens are improving, and productivity per rig is rising again.

Natural gas is a different story. This one looks like it’s setting up for a stealth bull move. Everyone is underweight LNG plays, but with new export capacity coming online and Asia buying again, I’m building a long position gradually. Anything under $3.25/MMBtu feels like a gift if we get a hot summer.

Cocoa? I’ve taken profits. That rally was a gift. Now it’s all about watching West African weather. If things stay stable, we could drift back to the $7,000s. But a negative ICCO revision or another virus scare and we’re off to the races again.

I’m still long gold and not flinching. The macro signals are getting louder: bond auctions failing, debt-to-GDP spiraling, and central banks quietly hoarding metal. Until the dollar surges or yields break higher, I’m staying in.

This is not a time for passive exposure. This is a sniper’s market. Wait for your shot — then pull the trigger fast.

My Predictions

🔹 Gold hits $2,600 by July​
Bond market fragility + central bank demand = runway for higher prices. Real yields are peaking, inflation expectations are sticky, and geopolitical tension is fueling the flight to safety. I see gold stretching to $2,600 before the Fed even blinks.

🔹 Cocoa dips to $7,200 before bouncing​
Speculative longs are unwinding fast, and Nigerian supply is helping plug some gaps. But the structural problems in West Africa haven’t gone away. Once this flush is over, look for a sharp V-bottom and possible return to $9,000 later in the year.

🔹 Brent tests $58–$60 in Q3​
The supply-demand imbalance is widening, not narrowing. OPEC+ credibility is crumbling, and demand indicators are soft. If the U.S. avoids a major hurricane season and refineries don’t go into emergency mode, crude likely grinds lower into summer.

🔹 Natural Gas hits $3.80+ by August​
LNG export momentum, global demand recovery, and any burst of summer heat will send Henry Hub sharply higher. The setup is perfect for a surprise rally — and traders are still underweight.

🔹 Copper spikes to $11,000 before September​
Even if we get a consolidation now, the long-term drivers are firmly in place. Green demand + geopolitical positioning + a weak pipeline of new supply = a likely upside breakout once the next China stimulus headline drops.

🔹 Corn rallies above $5.25 by mid-July​
Watch for Midwest dryness and ethanol margins. If crop conditions slide and gasoline demand rebounds even modestly, funds will pile back into corn. The trade is crowded but technically set up for a summer squeeze.