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Silver futures stole the show on Tuesday, topping the $60 threshold for the first time ever a day ahead of a Federal Reserve decision that’s expected to deliver another quarter-point interest-rate cut.
Short supplies and a touch of haven buying were cited amid the factors for silver’s latest move. The white metal is up around 110% so far in 2025, leaving stocks (S&P 500 up 16.3% year-to-date) and even gold (up 60%) in the dust.
Big gains for silver and other precious metals are attracting attention to the commodity sector, with the potential – but no guarantee – to attract broader investor interest to agricultural markets. Rallies for precious metals based on inflation fears can also signal support for ag commodities because they are also viewed as a hedge against rising prices.
Meanwhile, the addition earlier this year of silver to the U.S. government’s list of “critical” minerals has been a key driver, argued Ole S. Hansen, head of commodity strategy at Saxo Bank, in a note earlier this month.
“Once a commodity enters this category, it becomes plugged into a series of policy levers: Section 232 investigations, strategic stockpiling, fast-track permitting, and tax-credit eligibility for domestic processing. Most importantly, it increases the probability of tariffs or quotas being introduced if the U.S. government concludes that import dependence poses a national-security risk,” he wrote.
Silver, he said, “is no longer trading primarily as a monetary metal or high-beta gold instrument. It is being repriced as a strategic technology input with a potential U.S. tariff premium embedded.”
Oil market faces ‘super glut’
Less encouraging for corn and soybean futures, the oil market faces the prospect of a “super glut” next year, the chief economist at one of the world’s largest commodity traders warned.
New drilling projects and slowing demand growth will likely keep pressure on already depressed crude prices in the year ahead, said Saad Rahim, chief economist at Trafigura, in remarks Tuesday accompanying the trading house’s annual results, the Financial Times reported.
“Whether it’s a glut, or a super glut, it’s hard to get away from that,” Rahim said.
Brent crude, the global benchmark, is down around 17% so far in 2025, headed for its worst year since 2020. Low crude prices can dent demand for corn and soybeans, making ethanol and biodiesel less attractive to refiners for blending purposes.
Fund managers bullish – but views on dollar are split
Fund managers are ending the year in a buoyant mood, according to S&P Global Investment Manager Index, whose survey found risk appetite rising in December to one of the highest levels seen in data that goes back to 2020.
The IMI Risk Appetite Index rose to +34% from +18% in December.
“Optimism is being fueled by hopes of further monetary policy loosening, helping stimulate sustained robust economic growth into the new year,” said Chris Williamson, chief business economist and executive director at S&P Global Market Intelligence, in a note.
Notable for commodity market participants, bearish views on the U.S. dollar index have eased with investors now split on the outlook for the greenback, according to S&P.