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Commodity Market Outlook 2024

B360 January 31, 2024, 3:12 pm
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As we enter 2024, we can look back to what has been an eventful year for the commodity markets. Russian invasion of Ukraine and the supply-chain issues from the pandemic had influenced prices upwards and ushered in a new market dynamic in 2022. However, a subdued economic outlook turned a thriving market into calm waters. In 2023, traders were excited by the prospect of rising oil prices. But the demand equation pulled down the commodity market indices. After numerous years of turbulence and uncertainty, commodity markets are still searching for a sustainable balance between supply and demand. 

Precious Metals 

Gold opened the year at $1,822.79 per ounce and quickly climbed the charts to reach the highest price of $2,080.07 per ounce. The market corrected with the value slumping till September. However, the markets skyrocketed once again during the last three months reaching $2,146.36 per ounce on December 3. Silver commenced at $23.95 per ounce and maintained a mixed trend throughout the year. It closed at $23.78 per ounce. Platinum started the year at $1,071 per ounce and closed at $988.84 per ounce. Palladium treaded a bearish trend ending the year at $1,096.50 per ounce, the lowest since November 2018. 

Rising inflation in the United States has provided tailwinds for the bullion. Since the currencies depreciate on the back of inflation, traders turn to gold to preserve their investment increasing demand for gold and driving prices higher. In 2024, market experts believe that the outlook for gold is positive over the short to medium term due to geopolitical factors. Analysts believe gold to be an integral asset to hold as interest rates peak and the timing and the extent of the rate cuts remain uncertain. Other precious metals will be driven by two factors. Firstly, the growth of the Electric Vehicle (EV) market will push the market upwards. However, the weakening demand from the construction sector will form a vital headwind factor. 

Base Metals

Copper was at a crossroads in 2023. The base metal started at $3.8093. The prices observed a sideways trend, ending the year at $3.8720. Real estate prices in China, the largest consumer of the base metal, continued to deteriorate and more than 50% of the real estate projects are expected to face delays. The demand for housing in the Eurozone is also forecasted to decrease in 2024 due to interest rate hikes, further limiting the demand for base metals. On the contrary, the EV market will support the demand for industrial metals in the new year. Lifting the demand for copper, lithium, nickel and others, the global registration of batteries is forecasted to grow by 35% to 13.5 million units. 


Opening at $80.40 per barrel, crude oil had a rollercoaster ride with an initial uptrend and then a downtrend to end the year at $71.38 per barrel. In 2024, the prices are forecast to further trend downwards owing to the slowing global energy demand. The ongoing real estate crunch and the moderate economic growth in China will curb energy demand countering the expected resurgence in oil consumption from other bullish factors. The energy market has remained the most unpredictable. The energy product has witnessed several upticks due to a series of output cuts by OPEC+ members and rising supply concerns on the back of the Israel-Hamas war. Volatile geopolitical factors with a possibility of an escalation of the war could increase the unpredictable nature of supply and prices. European natural gas prices are set to decline due to the higher-than-average storage levels. Interestingly, prices decreased by 68% in the first ten months of 2023 until they rallied by the year-end. 


With an improved outlook for grain supply, the average prices are forecast to continue moderating into 2024.
According to Brazil’s National Supply Company, the soybean planting area is expected to rise by 2.5% in 2024. Likewise, supply of corn is forecasted to be driven by larger output in the United States on better-than-expected yields. The developing El Nino weather pattern is a primary concern that could negatively affect output and hike prices. The El Nino weather patterns exert extreme weather conditions ranging from drought to flooding. Dry weather in India and Thailand has recently damaged sugar harvests resulting in global shortages and driving the prices to a 12-year high. Meanwhile, Australia observed its driest month in October in over 20 years leading to a fall in crop yields in one of the world’s largest wheat-exporting countries. 


The new decade has witnessed many dark events-from the Covid pandemic to wars in Ukraine and Gaza. Market pundits opine that even if such chaotic events fail to emerge in 2024, volatility will remain high as all categories of the commodity markets are yet to adapt to previous swings in the supply and demand dynamics. Every year has had a headlining act in the global commodity market. 2024 could yet have the most unpredictable one. 

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MARCH 2024

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