Diwali 2024 to Diwali 2025: A Year of Contrasting Fortunes in Global Commodity Markets
As the festival of lights, Diwali, marks the beginning of a new year in the Hindu calendar, it’s a good time to reflect on the performance of global commodity markets over the past year. From Diwali 2024 to Diwali 2025, the markets have painted a contrasting picture, with precious metals like silver and gold glittering, while energy prices, particularly crude oil, have dulled.
Silver: The Top Performer
Silver has emerged as the top performer this Diwali, soaring 60% over the year to $52 per troy ounce. This surge can be attributed to strong investment demand and industrial use, particularly from the solar sector. The silver price in India has also been impacted by the global trends, making it an attractive investment option for Indian investors.
Gold: A Close Second
Gold, another precious metal, has also performed well, with a 55% jump to $4,261 per ounce. The gold price in India has been influenced by the global market trends, as well as the demand for gold in the domestic market. Indian investors have traditionally been fond of gold, and its recent performance has only added to its appeal.
Crude Oil: A Year of Negative Returns
In sharp contrast to the precious metals, crude oil has given negative returns, slipping 17% to $61 a barrel. This decline can be attributed to elevated global supplies and slowing demand growth. The crude oil price in India has also been impacted, affecting the country’s import bill and inflation.
Industrial Metals: Steady Gains
Industrial metals like copper and aluminium have posted steady gains, with copper rising 12% to $10,604 per tonne and aluminium up 7% to $2,778 per tonne on the London Metal Exchange. These metals are crucial for various industries, including construction, manufacturing, and renewable energy, making them an important part of the global commodity markets.
Agricultural Commodities: Coffee Leads the Way
Among agricultural commodities, coffee has been the surprise outperformer, jumping 63% to $3.8 per pound, supported by tightening supply from key producing regions. Other agri-commodities, like soybean and corn, have also shown significant movements, impacting the Indian agricultural sector and food prices.
Equity Markets: A Mixed Bag
Equity markets across the world have delivered strong dollar-denominated returns through the year. The S&P 500 climbed 17%, the Dow Jones Industrial Average gained 11%, and Europe’s Euro Stoxx 50 advanced 25%. In Asia, the Nikkei 225 rose 23%, Hang Seng Index added 24%, and South Korea’s KOSPI led the rally with a 42% surge.
Indian Markets: Underperformance and Future Outlook
However, the Indian markets have underperformed their global peers, with the Nifty 50 rising just 1.5% in dollar terms. Analysts attribute this underperformance to a weaker rupee, elevated valuations, and a moderation in earnings growth. Foreign investor flows have also been diverted toward the US, Taiwan, and China, which offered better relative value.
Looking ahead to the new Samvat, analysts expect earnings momentum to strengthen in the second half of the fiscal. With the potential for one or two interest rate cuts, possible tax announcements, and short covering by foreign institutional investors, the outlook for Indian equities appears more optimistic than the year gone by. Indian investors can look forward to a more positive trend in the Indian stock market, with opportunities for growth and investment.
Conclusion
In conclusion, the past year has been a mixed bag for global commodity markets, with silver and gold shining, while crude oil has given negative returns. The Indian markets have underperformed their global peers, but the outlook for the future appears more optimistic. As we enter the new Samvat, Indian investors can look forward to a more positive trend in the equity markets, with opportunities for growth and investment. Stay tuned for more updates and analysis on the Indian stock market news and trends.