An eventful year has come to an end - what might 2025 offer?

After a slump in February 2024, the value of the shiny metal only knew one direction: upwards. Driven by several factors, the price of gold, measured against the US dollar, exceeded the USD 2,500 per troy ounce mark for the first time in late summer and closed the year at USD 2,624 per troy ounce - an incredible annual increase of 27.50 percent.

Looking at the broader commodities landscape, the picture is mixed. The S&P® GSCI (Goldman Sachs Commodity Index), a commodity index that tracks 24 different futures contracts on various commodities, closed 2024 up 3.61 percent. The two oil types WTI and Brent have the largest weighting in this index at almost 50 percent. This year, the oil price was caught in a tug-of-war between geopolitical and supply-side factors as well as weakening demand from China due to the economic situation, which contributed to increased volatility. Brent crude closed the year down 1.65 percent.

The most important energy commodities and precious metals, with the exception of gold, silver and natural gas, did not record any particularly significant price increases over the course of the year. On the other hand, some agricultural commodities - such as futures contracts on orange juice, cocoa and coffee - saw a sharp rise in traded prices at times.

The historic gold rally was accompanied by (partly disappointed, partly fulfilled) hopes of interest rate cuts by the leading central banks. While the European, British and Swiss central banks were largely able to meet expectations, the world's most important central bank had to somewhat dampen the wishes of market participants. Despite a substantial interest rate cut of 50 basis points in September, the US Federal Reserve (Fed) was only able to partly meet the expectations that existed at the beginning of the year.

Despite these circumstances, the US economy remained resilient and the world's largest economy recorded growth. The US stock market, as measured by the S&P® 500, also rose by a remarkable 25 percent over the course of the year. The so-called “Magnificent 7” led the way, headed by shooting star NVIDIA. The AI industry leader achieved an annual performance of an incredible 178 percent. This led to a further increase in the divergence between the US and European stock markets. The Euro Stoxx® 50, an index made up of the 50 largest listed companies in the eurozone, rose by just 12 percent in 2024.

A few months before the presidential election in the USA, the US bond markets sent out a warning signal - the yield on 10-year US government bonds rose to almost 4.5 percent despite expected interest rate cuts. What has happened?

Both Donald Trump's and Kamala Harris' economic program for the USA were perceived by the market as inflationary and it reacted with a price discount on outstanding US government bonds. Donald Trump could further complicate the Federal Reserve's fight against stubborn inflation with his plans for higher import tariffs and deportations of illegal immigrants (a plan that could drain the US economy of labor in the low-wage sector) and lead to higher interest rates in the medium to long term. These economic policy risks, combined with the increasingly worrying US debt level, could dampen the mood of market participants somewhat in the coming year.

The new year could be decisive in many respects. On the one hand, it could show whether the high level of corporate investment in AI technologies (AI stands for artificial intelligence) will bear fruit and confirm that the new technology is not just a gimmick, but a lasting, productivity-enhancing breakthrough. Linked to this are hopes for a further advance in the S&P® 500, in particular the “Magnificent 7”, whose valuations have broken through levels rarely seen in history. For the new year, analysts are forecasting continued growth in the US equity market, albeit less pronounced than this year. The majority of experts expect growth in the higher single-digit percentage range.

While the US stock market seemed unstoppable, Europe is struggling with economic obstacles and is hoping not to fall behind the United States. Germany, the EU's largest economy, recorded a recession in 2024, as it did in the previous year. In addition to economic difficulties, the country is also experiencing political instability. The failure of the “traffic light” coalition government led by Chancellor Olaf Scholz shows that there is still some work to be done to get Europe's economic locomotive back on track.

The Swiss stock market presented a mixed picture in 2024. Shares in Lonza, Swiss Re and Holcim led the Swiss Market Index (SMI®). Stock market heavyweight Nestlé, on the other hand, saw its share price fall significantly and was one of the big underperformers. The Swiss economy recorded rather disappointing economic growth, primarily due to a pan-European economic downturn. On a positive note, however, inflation stabilized around the 1% mark at the end of the year. Economists are also expecting modest economic growth in the new year, but not a recession. With further interest rate cuts and monetary policy measures, the Swiss National Bank could once again focus on combating the strength of the Swiss franc in order to support exporters.

China is also in danger of running out of steam. The global growth driver of recent decades barely reached its self-imposed target of 5 percent economic growth in 2024. Struggling primarily with weak domestic consumer demand, China adopted an economic stimulus package in the fall to boost domestic economic activity. This came after China effectively flooded the global market for electric vehicles, solar modules and other green technologies with a subsidized export initiative, to which both the EU and the US responded this summer with sharp tariff increases on imports of such goods from China.

Now, however, Trump is back in office. Tariffs on Chinese export goods are a key issue in the election program of the new, old US president. China has already threatened to devalue its currency, the yuan, to counteract the plan. Trump seems to want to push through his agenda despite calls for common sense from within his own ranks. Trump also mentioned that he wants to impose general import tariffs on exports from other regions of North America, Europe and Southeast Asia in order to further protect domestic production.  

The year 2025 could bring some challenges for investors, but also opportunities. Will Trump push through his plans and if so, how? Will Europe manage to get its lagging economies back on track? Will artificial intelligence prevail in other exciting fields of application?

It is very difficult to predict how the economy and stock markets will develop. However, some topics and trends or investment strategies could open up interesting investment opportunities.

The year 2025 is only a few days old, and many investors may already be eagerly looking at forecasts and outlooks and thinking about their investments. One asset class that is often somewhat neglected could also be of interest here: the commodity markets. After all, these could potentially be on the verge of a new super cycle.