Commodity Calls: Week Ending 21 February 2025

Gold surges on US dollar weakness, uranium falls on possible easing of Russian sanctions, and oil giant Brazil joins the OPEC+.

Join Global X each week for ‘Commodity Calls’ to explore all the recent signals and developments that occurred in the world of commodities.

Looking for more ETF Express? Check out this week’s Market Moves and Thematic Spotlight.

Gold

Bullish

  • Gold notched its eighth consecutive week of gains on the back of a further weakening US dollar.1 The US dollar has declined for a third week in a row after investors pared back tariff bets given Trump’s relatively muted enforcement. A weaker US dollar helps improve demand for gold as the metal becomes cheaper for non-US countries.
  • Markets have grown increasingly concerned over the US’s turnaround on support for Ukraine.2 Investors may be allocating to the precious metal as uncertainty once again picks up in Eastern Europe.

Bearish

  1. A resolution of the conflict between Russia and Ukraine could trigger European selling.3 Gold loses some of its appeal as a safe haven asset when geopolitical concerns ease as investors tend to re-allocate to riskier assets.

Explore physical gold with GOLD and GXLD. 

Uranium

Bullish

  • As of the end of January, the uranium spot price has fallen more than 10% below its long-term contract price.4 This re-establishes the historical relationship between spot and contract prices and provides a floor for the uranium price unless long-term contract demand weakens.

Bearish

  • Uranium prices have fallen as the market priced-in an end to the Russian Ukraine conflict and subsequently dropping of sanctions.5 Russia controls roughly 45% of global uranium enrichment capacity. The US and United Kingdom currently have sanctions against Russian uranium exports.

Explore copper with ATOM.

Crude Oil

Bullish

  • Brazil has joined the OPEC+ after two years of invitations from the oil producing bloc.6 However, it’s membership will not be binding with regard to current production cuts. Brazil is the seventh largest oil producer in the world.

Bearish

  • The US has stated it is open to easing sanctions on Russia if the country displays “noticeable changes” in its behaviour.7 The Biden Administration’s farewell sanctions on Russian oil have upended global oil trade and forced Asia to rush and cover Russian barrels with alternative supply.
  • Russia has denied that the OPEC+ are discussing possibly delaying its scheduled oil supply increase this April.8 This comes as reports rolled in that the OPEC+ group were mulling over postponing production increases. Earlier this month, the JMMC, an OPEC committee, made the decision to not postpone the scheduled increase.

Explore crude oil with BCOM.

 

Forecasts are not guaranteed and undue reliance should not be placed on them. This information is based on views held by Global X as at 25/02/2025. Investing involves risk, including the possible loss of principal. Diversification does not ensure a profit nor guarantee against a loss.

Brokerage commissions will reduce returns.

This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. This information is not intended to be individual or personalised investment or tax advice and should not be used for trading purposes. Please consult a financial advisor or tax professional for more information regarding your investment and/or tax situation.