The year 2025 is shaping up to be a mixed bag for commodity markets. While global commodity prices are largely expected to fall due to a sluggish economic outlook and a resurgent U.S. dollar, certain commodities such as gold and gas are poised for a rally. Industry experts and market participants are closely monitoring these trends, particularly in the context of China’s economic policies and global geopolitical developments.
According to Sabrin Chowdhury, the head of commodities analysis at BMI, commodities in general will face pressure across the board in 2025. The strength of the U.S. dollar is expected to cap demand for commodities priced in the greenback, making them more expensive for buyers using other currencies. This trend is likely to be exacerbated by a sluggish global economic outlook, which will dampen demand for raw materials and energy resources.
Gold prices, which notched a series of all-time highs in 2024, are expected to continue their upward trajectory in 2025. Adrian Ash, director of research at BullionVault, a gold investment services firm, attributes this optimism to investors’ pessimism about geopolitics and government debt. Gold’s role as a hedge against risk and inflation makes it an attractive asset in uncertain times. JPMorgan analysts also forecast a rise in gold prices, particularly if U.S. policies become more disruptive, leading to increased tariffs, elevated trade tensions, and higher risks to economic growth. Gold prices, which rose about 26% in 2024, are forecast to reach $3,000 per ounce in 2025.
Global natural gas prices have rallied since mid-December 2024, driven by cold weather and geopolitical tensions. Ukraine’s recent halt of Russian gas flow to several European nations on New Year’s Day has introduced greater uncertainty to the global gas markets. As long as the cutoff remains in place, gas prices are likely to remain elevated. BMI forecasts gas prices to rise by about 40% in 2025 to $3.4 per million British thermal units (MMBtu), driven by growing demand from the LNG sector and higher net pipeline exports. LNG will continue to drive new consumption, supported by rising export capacity and strong demand in Europe and Asia, according to BMI analysts.
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Crude oil prices are expected to slip in 2025, continuing the trend from 2024, which saw prices dragged down by weak Chinese demand and a supply glut. The International Energy Agency (IEA) forecasted global oil demand to grow by under a million barrels per day in 2025, a significant slowdown compared to the two million barrels per day increase in 2023. Commonwealth Bank of Australia expects Brent oil prices to fall to $70 per barrel this year, citing increased oil supply from non-OPEC+ countries that will likely outpace the rise in global oil consumption. BMI noted that the first half of 2025 is likely to see a supply glut as substantial new production from the U.S., Canada, Guyana, and Brazil comes online. If OPEC+ plans to roll back voluntary cuts materialize, the oversupply will further pressure prices.
Silver is expected to see price increases in 2025, driven by strong industrial demand. Silver is used in a variety of applications, including solar panels, automobiles, jewelry, and electronics. The demand for solar power, in particular, is expected to remain resilient, and the metal’s supply is limited.
Copper, a key material in the manufacturing of electric vehicles and power grids, may see a dent in prices in 2025. The metal reached a record high in May 2024, largely due to a squeezed market and the global energy transition. However, a potential deceleration in the energy transition, driven by policy shifts, might dampen the “green sentiment” that bolstered prices in 2024. John Gross, president of John Gross and Company, a metals management consultancy, expects copper prices to trend lower in 2025 due to a cocktail mix of high interest rates, elevated interest rates, and a stronger dollar, which will weigh on all metals markets.
Iron ore prices are forecast to drop in 2025, driven by an oversupply resulting from Chinese policies and geopolitical factors. Goldman Sachs expects prices to decline to $95 per ton in 2025, citing the expected U.S. tariffs on China, the changing nature of Chinese stimulus, and the introduction of new low-cost supply. Despite China likely importing a record amount of iron ore this year, the market is expected to move into a surplus, leading to a decline in prices.
The global commodity markets in 2025 are expected to be characterized by a mix of trends, with some commodities facing headwinds while others continue to rally. However, commodities are a solid investment option due to their inherent scarcity and long-term value as demand continues to grow. With that in context, let’s take a look at the 10 best commodity stocks to invest in according to hedge funds.
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Our Methodology
To compile our list of the 10 best commodity stocks to invest in according to hedge funds, we used commodities ETFs to compile a list of 25 companies that are involved in mining, trading or processing of commodities. We then used Insider Monkey’s Hedge Fund database to rank 10 stocks with the largest number of hedge fund holders, as of Q3 2024. The list is sorted in ascending order of hedge fund sentiment.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
10 Best Commodity Stocks to Invest in According to Hedge Funds
10. Alcoa Corporation (NYSE:AA)
Number of Hedge Fund Investors: 42
Alcoa Corporation (NYSE:AA) is a vertically integrated producer of aluminum, bauxite, and alumina. The company’s extensive portfolio includes bauxite mines, alumina refineries, aluminum smelters, and cast houses. Alcoa Corporation’s (NYSE:AA) lightweight aluminum products are critical in reducing emissions and increasing energy efficiency in transportation.
Alcoa Corporation (NYSE:AA) is dedicated to building strong relationships with its customers and suppliers. The company has expanded several important partnerships and introduced new products such as the EcoSource non-metallurgical alumina and low-carbon Equilum primary aluminum. These products help meet customer demands for sustainable and high-quality materials. By focusing on customer needs, Alcoa Corporation (NYSE:AA) aims to become the preferred supplier in the market.
Alcoa Corporation (NYSE:AA) is exploring opportunities to expand its production capacity and enter new markets. The company has restarted its Alumar smelter in Brazil, which has already achieved significant production levels. The company is also considering other capacity expansion projects and remains open to funding those that meet its return criteria and align with market demand.
Furthermore, Alcoa Corporation (NYSE:AA) is also planning to leverage its global network to respond to market changes and challenges. The company is fully prepared to redirect its Canadian production to its smelters in Europe if the U.S. government imposes tariffs on Canadian aluminum. The company is also working on improving its operations in Spain, particularly at the San Ciprian complex, through a memorandum of understanding (MOU) with key stakeholders.
9. Shell plc (NYSE:SHEL)
Number of Hedge Fund Investors: 48
Shell plc (NYSE:SHEL) is one of the world’s largest integrated energy companies, operating across the entire oil and gas value chain, including exploration, production, refining, and distribution. The company generates revenue through the extraction and sale of oil and natural gas, as well as the refining and marketing of petroleum products.
Shell plc (NYSE:SHEL) is making notable progress in its integrated gas business, particularly in liquefied natural gas (LNG). With a robust portfolio of LNG projects, the company recently started operations at Mero-3 in Brazil and continues developing LNG Canada. These projects align with the company’s strategy to leverage its leading position in the LNG market. Shell plc’s (NYSE:SHEL) focus on LNG is rooted in its view that natural gas will play a key role in the energy transition over the coming decades. Shell plc (NYSE:SHEL) is also investing selectively in high-value opportunities within its portfolio. In its upstream segment, the company is emphasizing deep-water projects in the Gulf of Mexico and Brazil, particularly in areas where it has competitive advantages.
Additionally, Shell plc (NYSE:SHEL) is exploring new opportunities in basins such as Namibia, where it has been active in exploration while closely monitoring developments by other players in the region. Although cautious about potential challenges in Namibia, the company is committed to pursuing commercially viable projects that meet its rigorous investment standards.
8. Agnico Eagle Mines Limited (NYSE:AEM)
Number of Hedge Fund Investors: 54
Agnico Eagle Mines Limited (NYSE:AEM) is a leading gold mining company with operations in Canada, Australia, Mexico, and Europe. The company is known for its high-quality mines, including Meadowbank, Meliadine, and Detour Lake in Canada.
Agnico Eagle Mines Limited (NYSE:AEM) is prioritizing the growth of its resource base and the extension of mine life through extensive exploration programs. The company has launched one of its largest exploration initiatives to date, deploying over 100 diamond drill rigs across various sites. Notable successes include the eastward extension of the East Gouldie Zone at the Odyssey project in Quebec and the discovery of high-grade mineralization at the Patch 7 zone in the Madrid deposit area at Hope Bay, Nunavut. The continuous exploration and operational improvements have also extended the life of the Meadowbank and Meliadine mines.
Furthermore, Agnico Eagle Mines Limited (NYSE:AEM) is advancing the development of the Odyssey mine, which is on track to become Canada’s largest underground gold mine by 2028. These discoveries are poised to significantly enhance the company’s resource base and support future production growth. The company recently announced its acquisition of O3 Mining for approximately $150.54 million. O3 Mining’s primary asset is the 100 % owned Marban Alliance property in Quebec’s Abitibi region, which is located adjacent to Agnico Eagle Mines Limited’s (NYSE:AEM) Canadian Malartic complex.
7. Cameco Corporation (NYSE:CCJ)
Number of Hedge Fund Investors: 60
Cameco Corporation (NYSE:CCJ) is one of the world’s largest uranium producers, with a strong presence in Canada’s Athabasca Basin, primarily through its Cigar Lake, Key Lake, and McArthur River mines. The company operates an integrated business model that encompasses uranium refining, conversion, and fuel manufacturing. Additionally, Cameco Corporation (NYSE:CCJ) is actively advancing small modular reactor (SMR) nuclear technology.
Cameco Corporation (NYSE:CCJ) is focused on optimizing its assets to maintain a robust and resilient supply chain. The company has made substantial investments in automation, digitization, and project optimization at its MacArthur River and Key Lake operations, which have delivered impressive results. These investments were made during market downturns, and are now yielding benefits by lowering costs and increasing production levels. For instance, the Key Lake Mill is projected to produce approximately 19 million pounds of uranium in 2024, surpassing the earlier estimate of 18 million pounds.
Cameco Corporation (NYSE:CCJ) is also evaluating the work and capital required to expand its MacArthur River and Key Lake operations to their licensed capacity of up to 25 million pounds per year. The company is carefully analyzing how to de-risk and de-bottleneck these operations to achieve a higher baseline level of production without incurring substantial additional investments.
6. Chevron Corporation (NYSE:CVX)
Number of Hedge Fund Investors: 63
Chevron Corporation (NYSE:CVX) is a global energy company headquartered in the United States. The company is engaged in the exploration, production, and refining of oil and natural gas. The company also invests in renewable energy. Chevron Corporation (NYSE:CVX) sells fuels, lubricants, and petrochemicals to both industrial and retail customers worldwide.
Chevron Corporation (NYSE:CVX) is advancing several key projects aimed at driving production and cash flow growth in the coming years. The company’s high-pressure Anchor project in the Gulf of Mexico is now operational, with water injection underway to enhance production at the Jack/St. Malo and Tahiti fields. These initiatives, along with additional projects scheduled through 2025, are projected to increase Gulf of Mexico production to 300,000 barrels per day by 2026.
Chevron Corporation (NYSE:CVX) is also making substantial investments in technology and digital tools to improve productivity and reduce costs. The company has been focused on portfolio optimization and is utilizing technology to enhance productivity and transform how and where work is performed. These efforts are expected to result in $2 billion to $3 billion in structural cost reductions by the end of 2026. Additionally, Chevron Corporation (NYSE:CVX) is actively managing its capital spending to ensure it remains disciplined and aligned with its financial priorities.
5. Newmont Corporation (NYSE:NEM)
Number of Hedge Fund Investors: 63
Newmont Corporation (NYSE:NEM) is the world’s largest gold mining company, with additional operations in silver, copper, zinc, and lead. The company operates mines in North America, South America, Australia, and Africa.
Newmont Corporation (NYSE:NEM) is actively reshaping its portfolio and organizational structure to drive future growth and enhance shareholder value. Following its 2023 acquisition of Newcrest Mining, the company has initiated a strategic divestiture program to shed non-core assets, optimize its portfolio, and reduce its debt. Notable divestitures include the sale of the Eleonore gold mine in Quebec, the Musselwhite gold mine in Ontario, and the Cripple Creek and Victor gold mine in Colorado, which collectively generated over $3.9 billion in gross proceeds. These funds will be strategically reinvested to strengthen Newmont Corporation’s (NYSE:NEM) core operations and financial position. The company has authorized a $3 billion stock buyback program through October 2026 and has made significant progress in debt reduction.
On the operational front, Newmont Corporation (NYSE:NEM) is streamlining its corporate structure to improve efficiency and effectiveness. Bloomberg reported that the company has laid off at least 10 senior managers and plans to consolidate several business units into three. This restructuring is designed to simplify reporting and decision-making processes, reduce overhead costs, and enhance operational agility.
4. ConocoPhillips (NYSE:COP)
Number of Hedge Fund Investors: 66
ConocoPhillips (NYSE:COP) is one of the largest independent exploration and production companies focused on crude oil, natural gas, and natural gas liquids (NGLs). The company operates across North America, Europe, Asia, and Australia.
ConocoPhillips (NYSE:COP) is actively pursuing strategic acquisitions to strengthen its portfolio and drive growth. The company recently finalized the acquisition of Marathon Oil Corporation. This acquisition will significantly enhance ConocoPhillips’ (NYSE:COP) presence in key U.S. shale basins, including the Permian, Eagle Ford, and Bakken. The company has developed a comprehensive integration plan aimed at achieving at least $500 million in synergies, primarily through reductions in overhead and operating costs. Furthermore, ConocoPhillips (NYSE:COP) expects to double this initial synergy target to $1 billion, driven by capital optimization and more efficient drilling and refracturing programs. By leveraging the combined strengths of both companies, ConocoPhillips (NYSE:COP) aims to achieve low-single-digit production growth in 2025 with a pro-forma capital expenditure (CapEx) of under $13 billion.
ConocoPhillips (NYSE:COP) is also making significant progress on the Willow project in Alaska and is focusing on engineering, procurement, and fabrication. The Willow project is anticipated to play a key role in the company’s production growth in the coming years. Additionally, ConocoPhillips (NYSE:COP) is advancing its Port Arthur LNG and Callaway expansion projects, which aim to enhance its position in the global LNG market and provide access to premium gas markets in Europe and Asia.
3. Teck Resources Limited (NYSE:TECK)
Number of Hedge Fund Investors: 68
Teck Resources Limited (NYSE:TECK) is a leading diversified commodities company committed to responsible mining and mineral development with major business units focused on copper, zinc, and other energy transition metals. The company operates projects in Canada, the United States, and Chile.
Teck Resources Limited (NYSE:TECK) is actively progressing a portfolio of near-term copper projects that are well-funded and have the potential to be sanctioned in 2025. At Highland Valley, the company has revised its environmental assessment and is making progress through the permitting process. The project is on track for completion of engineering and project execution planning by Q2 2025.
Similarly, the company is advancing its permitting application at the San Nicolas joint venture in Mexico and is closely monitoring the political situation to ensure a clear path forward. The company is also evaluating the feasibility of an underground operation at San Nicolas, which could provide additional flexibility and opportunities for value creation. Teck Resources Limited’s (NYSE:TECK) strategic focus on copper and other energy transition metals is driven by the growing demand for these materials in the shift towards renewable energy and electric vehicles.
2. Freeport-McMoRan Inc. (NYSE:FCX)
Number of Hedge Fund Investors: 74
Freeport-McMoRan Inc. (NYSE:FCX) is a U.S.-based mining giant and one of the largest producers of copper, gold, and molybdenum. The company operates major mining projects in North and South America and Indonesia.
Freeport-McMoRan Inc. (NYSE:FCX) is committed to continuous improvement and innovation across its operations. The company has set a target to reach a run rate of 300 million pounds of incremental copper production by the end of 2025, with the potential to produce between 300 and 400 million pounds in 2026. This ambitious goal is driven by the company’s innovative leach initiative, which has already achieved a 50% increase in copper production at a very low cost. The initiative involves deploying new operating practices to recover copper from previously considered waste materials, by adding heat to leach processes and optimizing solution chemistry. This not only enhances the company’s cost position but also extends the life of existing operations, making it a highly value-enhancing growth opportunity.
Freeport-McMoRan Inc. (NYSE:FCX) is actively pursuing brownfield expansion opportunities to position itself for long-term growth. In the United States, the company is advancing projects at its Baghdad and Safford Lone Star operations. The Baghdad expansion, which aims to double current production levels, is being supported by investments in site infrastructure and tailings expansion. The company is also exploring ways to reduce the capital intensity of the project, with a decision on the path forward expected by year-end 2025. At Safford Lone Star, a major brownfield expansion is being studied, with the potential to significantly increase production and solidify the company’s presence in Arizona over the next decade.
1. Exxon Mobil Corporation (NYSE:XOM)
Number of Hedge Fund Investors: 86
Exxon Mobil Corporation (NYSE:XOM) is one of the world’s largest publicly traded international energy companies. The company’s operations span the entire value chain, from upstream oil and gas exploration to downstream refining, as well as the manufacturing and marketing of petroleum products.
Exxon Mobil Corporation (NYSE:XOM) is increasingly positioning itself to capitalize on the growing demand for natural gas and liquefied natural gas (LNG). The company has made significant investments in natural gas fields and LNG projects, which has expanded its LNG capacity in key regions such as the Gulf of Mexico, Australia, and Mozambique. These investments are not only aligned with global efforts to reduce carbon emissions but also take advantage of the increasing demand for natural gas to power data centers and other energy-intensive industries.
Exxon Mobil Corporation (NYSE:XOM) is also forming strategic alliances and partnerships to expand its reach and access new markets. The company has established collaborations with national oil companies, technology firms, and other industry players to leverage its expertise and resources. Furthermore, Exxon Mobil Corporation (NYSE:XOM) has partnered with China’s Sinopec to develop large-scale LNG projects in Guangdong, China, which is crucial for meeting the growing energy demand in Asia. These partnerships not only provide access to new markets and resources but also help to mitigate risks and share costs. By building a robust network of strategic alliances, Exxon Mobil Corporation (NYSE:XOM) aims to enhance its competitive position and drive sustainable growth in a rapidly evolving energy landscape.
While we acknowledge the potential of Exxon Mobil Corporation (NYSE:XOM) to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than XOM but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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