Stock Market Today: Dow futures stall near record levels ahead of upcoming CPI report
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Stock Market Today: Dow futures stall near record levels ahead of upcoming CPI report

Posted on by Amelia Pressman

The environment for “risky” commodities like oil and base metals is relatively bearish, Citigroup strategists wrote in their report on the outlook for the commodities market in 2025, but the outlook for gold is “relatively bullish,” partly due to deterioration be US labor market.

US President-elect Donald Trump will find a significantly more pessimistic economic environment at home and abroad compared to his first term as president, strategists said. The U.S. and global growth outlook is also likely to be “further challenged” by higher U.S. tariffs on Chinese imports in the first quarter of next year.

Citigroup strategists said the global oil market is likely to be in surplus in 2025 even if the group of major oil producers known as OPEC+ maintains production at current levels. They assume that in 2025 there will be a supply surplus of an average of 800,000 barrels per day. With this in mind, they are forecasting a 15 to 20 percent drop in oil prices, with Brent expected to be at $60 a barrel by mid-2025 and prices likely to remain in their base case at around the second half of 2025 and into 2026 are at this level.

Still, they see the backdrop for gold as “relatively bullish,” supported by continued deterioration in the U.S. job market, continued high interest rates weighing on growth, and higher demand for exchange-traded funds. Strategists left their zero- to three-month target for gold prices unchanged at $2,800 an ounce and their six- to 12-month target unchanged at $3,000 an ounce.

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