How 2024 Political Events Shaped Global Commodity Prices

Updated 12/28/2024 9:00:00 AM

Reviewing Global Economy in 2024

The world witnessed remarkable events in 2024, marked by significant political events that influenced the global economic scene. From ongoing conflicts in Eastern Europe and the Middle East to pivotal elections in Western nations, these developments have echoed across the world. Coupled with the expansion of BRICS and the looming resurgence of the US-China trade war, the stage was set for transformative shifts in global economic dynamics.

In this Factsheet, we examine how these events have influenced global economic trends, focusing on key commodities such as gold, crude oil, and natural gas, and their impacts on the performance of the US dollar and other critical financial instruments.

Gold prices rose from $2,068 per ounce in early January to $2,616 by late December, marking a 26.5% year-to-date (YTD) growth.
In mid-February, prices dipped below $2,000 per ounce following unexpectedly high US inflation, which caused investors to scale back expectations for early Federal Reserve interest rate cuts.
A week before the US presidential election, gold surged to a record high of $2,778 as investors turned to the precious metal as a safe-haven asset amidst growing uncertainty.
International financial institutions and banks projected that gold would reach and even exceed the level of $3,000 per ounce in 2025.
The US Federal Reserve lowered its key interest rate three times in 2024, pushing the rate down from 5.5% at the beginning of the year to 4.5% during its latest meeting in late December.
Driven by the implementation of the Federal Reserve’s first rate cut since the COVID-19 pandemic, the US dollar saw significant depreciation against several currencies. However, along the year the Nominal Broad Dollar Index showed that the US dollar appreciated against a worldwide basket of currencies.
Following the success of Donald Trump in the US election, Bitcoin's price has surpassed $107,000 for the first time since its inception. Experts predict it could exceed $200,000 by the end of 2025. These forecasts are fueled by Trump’s push for a crypto-friendly regulatory framework, reversing the restrictions imposed during Biden’s administration.
Brent oil prices saw fluctuations throughout the year, starting at $75.89 per barrel in January, dropping slightly to $72.88 by late December.
Driven by OPEC+ supply cuts, strong demand, and increased geopolitical risks, especially in the Middle East, Brent prices hit a peak in April at $91.17 per barrel.
In September 2024, Brent crude prices fell below $70 per barrel for the first time in over two years, influenced by strong supply levels, demand concerns, and widespread speculative selling.
Brent prices are projected to range between $60 per barrel and $80 per barrel in 2025. Moreover, the global demand for crude oil is projected to range between 0.99 and 1.54 million barrels per day.
Natural gas prices jumped by 46% from $2.568 per million British thermal units (MBtu) in January to $3.748 per MBtu in late December. The prices are set to keep rising over the coming months as forecasts for cold weather trigger higher heating demand in key consumer hubs.