Commodity prices highly volatile with platinum leading gains in first half of 2025

​​​​​​​By Burhan Sansarlioglu and Emir Yildirim

ISTANBUL (AA) - Commodity prices were volatile in the first six months of the year, with sharp price fluctuations due to tariffs and global economic uncertainties, while platinum led with a nearly 50% rise among other rising assets.

Weak domestic demand in China is one of the major risks deepening deflation concerns in that country. That is in addition to US President Donald Trump’s constant statements on tariffs and his responses to retaliatory statements, keeping the trade war alive.

Trump’s shifting stance on tariffs has fueled uncertainties in commodity markets, causing selling pressure, while escalating trade war concerns heighten the risks of further selling pressure.

Rising tensions in the Middle East are among the factors influencing commodity prices, as the Israel-Iran conflict and the US’ direct involvement particularly affected gold and oil prices.

Gold climbed 25.9%, silver was up 25%, platinum grew 49.9% and palladium added 20.9% per ounce in the first six months of the year. The ounce price of gold reached a record $3,499 and platinum saw its 11-year high at $1,437.

Ongoing supply constraints coupled with strong industrial demand supported silver prices from January - June, while silver’s rising role in solar energy and electronics contributed to its price hike. The Silver Institute forecast further supply constraints, which will be the main driver of prices moving forward.

Platinum rose on tariff wars and US–China tensions, as well as the breakup of billionaire Elon Musk and Trump. Musk used to be an advisor to Trump before he and the US president had a falling out, which led to estimates that Trump may reduce electric vehicle (EV) incentives.

The possibility of EV incentives’ elimination pushed up platinum due to its use in cars with internal combustion engines, while China’s massive platinum imports in April contributed to the demand.

As for base metals, the pound price of copper soared 26.8%, lead was up 4.7% and aluminum climbed 1.8%, while nickel fell 1.1% and zinc was down 7.9%.

China’s strong copper demand kept prices going up, while concerns about tariffs and the copper inflow into the US added fuel to the fire.

Energy commodities saw heavy selling pressure in the first six months of the year. Brent crude oil declined 11% in May and natural gas was down 4.9%.

The OPEC+ group’s decision to increase production led to a decline in Brent crude oil, while concerns about a global trade war potentially reducing fuel demand and thereby triggering an oversupply kept pushing down oil prices.

Declining demand for natural gas in Asia, especially in China, contributed to the decline.

Agricultural commodities had sharp declines from January - June. Wheat fell 2.4% per bushel due to rainfall in the US, rice declined 10.9% on global production estimates and corn decreased 10.7% due to declining production forecasts.

Soybean climbed 1.6% amid strong demand from China for Brazilian soybeans as a result of the US-China trade war.

Cotton declined 0.4% per pound amid growing global growth concerns and falling demand, while sugar fell 15.9% after Brazil estimated sugar production would reach record levels in the 2025 - 26 season.

Coffee fell 6.1% and cocoa was down 22.9% during the same period.

“While weak output from South Africa and a pick-up in Chinese demand have helped to support platinum prices, a surge in speculative buying appears to be the main driver of rising prices,” Hamad Hussain, climate and commodities economist at Capital Economics, told Anadolu.

“This means that the platinum rally is very vulnerable to a shift in market sentiment, which would lead to prices falling back,” he added.