JPMorgan analysts foresee a tumultuous 2025 for base and precious metals markets, initially facing weakness from U.S. tariff restrictions on China, followed by a vigorous recovery as China stimulates its economy. This dual-phase forecast presents potential opportunities for investors in the face of expected volatility.

Base Metals: A Two-Phase Outlook

• Short-Term Weakness:
  Early 2025 may bring downward pressure on base metal prices due to tariff uncertainties and a weakened Chinese yuan. Investor sentiment is cautious amid geopolitical tensions affecting global trade.
• Recovery Expected in Q2:
  By the second quarter, increased Chinese stimulus and better valuations are likely to drive recovery, with copper projected to reach $10,400 per metric ton by year-end 2025.

Precious Metals: Bright Predictions for 2025

JPMorgan’s positive forecasts for precious metals arise from market stabilization and supply constraints:

• Gold: Expected to rise to $3,000 per ounce due to its safe-haven status amidst economic uncertainties.
• Silver: Projected to reach $38 per ounce, driven by industrial demand and market optimism.

Iron Ore: Gradual Improvement

JPMorgan notes improving conditions in iron ore, supported by:

• Chinese Steel Demand: Rising output and falling inventories are expected to push prices to $100 per ton in 2025.

Risks to Monitor

Important risks affecting these forecasts include:

• The scope of U.S. tariffs on China.
• The timing and scale of Chinese stimulus measures.
• Market supply adjustments from major mining firms.

Conclusion

JPMorgan’s outlook for 2025 highlights both challenges and potential opportunities for metals investors. While geopolitical tensions and tariff policies may create short-term challenges, recovery driven by economic stimulus and supply-demand dynamics could pave the way for profitable investments.