Global commodity markets are bracing for a sustained downturn, with prices expected to hit their lowest level in six years by the end of 2026. According to the latest Commodity Markets Outlook from the World Bank Group, this trend marks the fourth consecutive year of decline, driven by a combination of persistent policy uncertainty and a growing global oil surplus. The forecast anticipates a 7% drop in prices for both 2025 and 2026.
Oil surplus pressures global markets
The expansion of the oil glut is a primary driver behind the bearish outlook for the energy sector. As supply outpaces demand, developing economies are being urged to utilize the current environment of lower energy costs to implement necessary fiscal reforms. While the energy sector faces downward pressure, base metals such as aluminum and copper remain critical components for the ongoing expansion of AI infrastructure, providing a potential floor for industrial commodity demand.
Gold, meanwhile, continues to tread water near the $4,000 per troy ounce level, struggling against a strengthening US Dollar and rising Treasury yields. The precious metal's inability to break higher reflects a broader risk-off sentiment currently permeating the global financial landscape. Investors remain cautious as they weigh the impact of potential fuel levy cuts and shifting geopolitical tensions on future price stability.
— World Bank Group, Commodity Markets Outlook
- Projected 7% price decline in 2025 and 2026
- Gold hovering near $4,000 per ounce
- Expanding oil surplus impacting energy prices
- Base metals supported by AI infrastructure demand
