Diwali 2024 to Diwali 2025: A Year of Contrasting Fortunes in Global Commodity Markets
From one Diwali to the next, global commodity markets painted a contrasting picture. While precious metals glittered, energy prices dulled. Silver emerged as the top performer this Diwali, soaring 60% over the year to $52 per troy ounce, outpacing gold’s 55% jump to $4,261 per ounce. The surge came on the back of strong investment demand and industrial use, particularly from the solar sector.
In sharp contrast, Brent crude oil slipped 17% to $61 a barrel, as global supplies remained elevated amid slowing demand growth. Industrial metals 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.
Precious Metals Shine
The performance of precious metals, particularly silver prices and gold prices, was a highlight of the year. The strong investment demand and industrial use of these metals drove their prices up, making them attractive to Indian investors looking to diversify their portfolios.
Energy Commodities Struggle
On the other hand, energy commodities such as crude oil struggled due to elevated global supplies and slowing demand growth. This had a negative impact on the energy sector, with many companies facing challenges in maintaining their profitability.
Agricultural Commodities
Among agri-commodities, coffee was the surprise outperformer, jumping 63% to $3.8 per pound, supported by tightening supply from key producing regions. This was a welcome relief for coffee producers who had been facing challenges due to fluctuating weather conditions and pests.
Equity Markets
Equity markets across the world 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 Lag Behind
However, India lagged global peers, with the Nifty 50 rising just 1.5% in dollar terms. Analysts attributed the underperformance to a weaker rupee, elevated valuations, and a moderation in earnings growth. Foreign investor flows were also diverted toward the US, Taiwan, and China, which offered better relative value.
Outlook for the New Samvat
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.
In conclusion, the year from Diwali 2024 to Diwali 2025 was a mixed bag for global commodity markets, with precious metals shining bright and energy commodities struggling. As we look ahead to the new Samvat, Indian investors would do well to keep a close eye on the performance of these commodities and adjust their investment strategies accordingly.