February 10, 2025

Report Predicts Gold and Cocoa Prices to Rise in 2025, While Crude Oil Prices Decline

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Gold and Cocoa

Gold and cocoa prices are expected to see substantial gains in 2025, while Brent crude oil prices are forecasted to experience a decline. These developments are primarily attributed to several key factors, including geopolitical tensions, anticipated interest rate cuts by the US Federal Reserve, supply constraints in the cocoa market, and shifting global demand for energy.

According to Databank Research, gold prices are projected to rise significantly in 2025, with estimates ranging between US$2,600 and US$3,100 per ounce. This increase is largely attributed to ongoing geopolitical uncertainties, which are expected to drive strong demand for gold as a safe-haven asset. The report suggests that geopolitical tensions will continue to influence the global economy, encouraging investors to seek the stability and security that gold offers in times of crisis. Furthermore, the anticipated interest rate cuts by the US Federal Reserve in 2025 are expected to bolster gold prices even further. Following the Federal Open Market Committee (FOMC) meeting in January 2025, these cuts could enhance gold’s appeal, as lower interest rates typically reduce the opportunity cost of holding non-yielding assets like gold.

Given the positive outlook for gold, the report recommends that local investors in Ghana consider diversifying their portfolios by exploring investment opportunities such as the New Gold Exchange-Traded Fund (ETF) and the Bank of Ghana’s Ghana Gold Coin (GGC). These financial products provide a way for investors to benefit from rising global gold prices, while also serving as a hedge against local currency depreciation, which is a concern for many investors in Ghana.

In addition to gold, cocoa prices are also expected to rise significantly in 2025, with projections ranging from US$7,000 to US$9,600. This price increase is largely driven by supply constraints in two of the world’s largest cocoa producers: Ghana and Côte d’Ivoire. These countries are recovering from adverse weather conditions, which have negatively affected cocoa yields. Additionally, illegal gold mining activities in Ghana have further contributed to the disruption of cocoa farms, exacerbating the supply shortage. The introduction of the European Union Deforestation Regulation (EUDR) in early 2025 is also expected to limit the availability of cocoa, further driving up prices. The EUDR aims to address deforestation linked to cocoa production, and its implementation will likely lead to stricter regulations that affect supply. This combination of supply challenges and strong global demand for chocolate is expected to result in higher cocoa prices throughout 2025.

On the other hand, Brent crude oil prices are forecasted to decline in 2025, with expectations for prices to remain below US$76 per barrel. This decrease in oil prices is attributed to several factors, including increased US oil inventories and a global shift toward cleaner energy sources. The ongoing transition to renewable energy is expected to reduce the demand for fossil fuels, particularly in major oil-consuming regions like China and North America. Additionally, these regions are facing economic challenges that are likely to dampen demand for crude oil in the coming year. As a result, global oil demand growth is projected to slow, decreasing from 1.74 million barrels per day (bpd) in 2024 to 1.64 million bpd in 2025.

In conclusion, the outlook for 2025 indicates that gold and cocoa prices will experience significant increases, driven by supply constraints, geopolitical tensions, and strong global demand. In contrast, Brent crude oil prices are expected to decline as a result of economic factors, such as the shift toward sustainable energy and reduced consumption in key markets. These trends highlight the dynamic nature of commodity markets and underscore the importance of understanding global economic forces when making investment decisions.

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