Precious Metals Define Commodity Performance in 2025

Key Takeaways:

• Precious metals dominated commodity returns in 2025.
• Sector allocation drove relative performance outcomes.
• Index construction shaped commodity return profiles.

Market Overview

Commodity performance in both the fourth quarter and full year 2025 was largely driven by precious metals, particularly gold and silver, with returns concentrated in a limited number of commodities. Year-to-date, the UBS CM Commodity Index (“CMCITR”) returned 9.5%, while the Bloomberg Commodity Index (“BCOM”) returned 15.8%. CMCITR performance was supported by gains in metals and livestock, despite weakness in energy and agriculture. Differences in performance primarily reflected variations in sector composition—most notably CMCITR’s lower structural exposure to precious metals—rather than broad-based weakness across the commodity complex.

A defining feature of CMCITR is its greater allocation to industrial metals and reduced allocation to precious metals relative to broader commodity benchmarks. In 2025, this positioning influenced relative outcomes, as precious metals accounted for a significant share of overall commodity returns.

The chart below highlights the differing allocations to precious metals and industrial metals between CMCITR and BCOM.

Comparative Index Sector Weights

Source: VanEck, Bloomberg. Data as of December 2025.

Sector Performance Summary

Sector-level returns highlight the divergence across commodity markets during the year:

• Precious metals rose 74.7%, representing the largest positive contribution to CMCITR returns. Gold gained approximately 63%, while silver rose roughly 139%, marking historically strong annual performance for both metals.
• Industrial metals increased 28.6%, supported by strong gains in copper and aluminum.
• Livestock gained 25.2%, driven primarily by higher live cattle prices.
• Energy declined 5.9%, reflecting persistent oversupply conditions.
• Agriculture fell 4.1%, with weakness across several major crops.

Despite headwinds in energy and agriculture, gains in metals and livestock supported a positive full-year outcome for the index.

Precious Metals: Concentrated Source of Returns

Precious metals’ performance was supported by a combination of factors, including geopolitical uncertainty, sustained central-bank demand, and reserve diversification trends. A roughly 9% decline in the U.S. dollar provided additional support. Trade policy uncertainty, ongoing conflicts in the Middle East and Ukraine, and continued central bank purchases contributed to elevated demand. During the second half of the year, investor participation increased, with notable inflows into gold, silver, and mining-related investment vehicles.

Industrial Metals: Relative Strength

Industrial metals were the strongest-performing sector outside of precious metals, supported by supply constraints and rising expectations for demand related to electrification and data-center infrastructure. Copper led the sector with a gain of approximately 44%, while aluminum rose about 20%.

Livestock: Tight Supply Conditions

Livestock prices contributed positively, led by live cattle, which rose roughly 30%. U.S. cattle inventories remain near multi-decade lows, and herd rebuilding is expected to occur gradually, influencing supply conditions.

Energy Markets: Supply-Driven Pressures Persist

Energy markets were a consistent drag on performance. Crude oil prices remained under pressure amid ample global supply following OPEC production increases. Both Brent and WTI crude declined by approximately 9%, while natural gas fell about 11%. Supply conditions suggest energy markets remain well balanced, with near-term price impacts uncertain.

Agriculture: Mixed but Generally Weak

Agricultural markets produced mixed results but trended lower overall. Cocoa and sugar recorded the largest declines, while soybeans finished modestly higher. Corn prices declined, reflecting favorable supply conditions.

Outlook for 2026

Looking ahead, commodities may continue to play an important role in diversified portfolios. Structural supply dynamics, geopolitical developments, and global demand trends remain key factors influencing commodity markets. While price volatility is likely to persist, commodities may offer diversification characteristics within broader asset allocation frameworks.

Learn more about the VanEck CM Commodity Index Fund and the VanEck CMCI Commodity Strategy ETF (CMCI), which seek to track, before fees and expenses, the CMCITR.