Commodities Market Forecast for the Fourth Quarter of 2025: Analysis by Citi

In the latest presentation from Citi Research, a team of strategists, under the leadership of Max Layton, Head of Commodities Research, has shared their outlook on more than 25 commodity markets for the fourth quarter of 2025 and 2026. They have also provided an updated analysis of the global macroeconomic environment.

One of the key takeaways from their presentation is the continued bullish market for gold and silver, and the modest bear market for crude oil into the early part of next year. The strategists predict that the ongoing bull market for gold and silver will eventually expand into copper and aluminum in 2026. This shift is anticipated to be driven by the assumption of a new dovish Federal Reserve leadership, leading to lower U.S. real interest rates, downward pressure on the dollar, and the injection of stimulus from the One Big Beautiful Bill Act.

The team at Citi Research believes that the drivers behind the gold bull market, both cyclical and structural, will remain intact in the near future. They have forecasted a price for gold of around $3,800 in the next 0-3 months, with an upward adjustment to $4,000 since the report’s publication. Spending on gold has reached levels higher than those seen during the oil shock of 1980, even exceeding levels from the last 50 years.

In contrast, the team expects Brent crude oil prices to decrease to $60 per barrel by the end of this year, with an average price of $62 per barrel for the subsequent quarters of 2026. They anticipate a slight downturn in oil prices due to China’s continued stockpiling and fewer visible inventories across OECD hubs. Despite headline surpluses driven by OPEC+ increasing oil capacity, the strategists do not foresee major risks on the horizon. However, they do highlight the potential for de-escalation in the Russia-Ukraine conflict as a downside risk, and the imposition of tariffs or sanctions on India and China as an upside risk.

In the realm of palladium, Citi Research sees significant short-term opportunities in the U.S. market. They believe the market is underpricing the potential risk of Critical Mineral Section 232 tariffs, which could be imposed with President Trump expected to receive a report on the matter by October 19. The team suggests that targeted measures, including immediate or gradual tariffs of up to 50%, could be implemented. They also highlight potential long-term buying opportunities in LME aluminum, especially amidst a cyclical recovery trade, related to a dovish Federal Reserve and growth initiatives ahead of the U.S. midterm elections.

Moreover, Citi Research maintains a positive outlook on copper and uranium. They project a $12,000-per-ton base case for copper over the next six to 12 months, with uranium prices forecasted to reach $100 per pound by the end of 2026. The team also anticipates a decrease in Arabica coffee prices in the coming year, driven by trade route reconfigurations and improved supply conditions in Brazil and Central America.

The team at Citi Research concludes their report by predicting an increase in EU allowance prices for emissions to €95 per ton by the end of 2025. They attribute this potential rise to tighter EU ETS balances and speculative trading activity. With a bullish outlook for various commodities, Citi Research provides a comprehensive analysis of the global macroeconomic landscape in their latest report, Commodities Market Outlook: 4Q ’25.