MUFG highlights three commodities trades for 2025, emphasizing a bullish view on gold, near-term upside for oil with medium-term downside, and bearish prospects for long-dated natural gas prices.
Key Trades:
Gold (Long Spot):
- Rationale:
- Anticipated US Fed rate cuts.
- Increased demand driven by US policy uncertainty and geopolitical tensions.
- Outlook:
- Strong demand from financial institutions, investors, and central banks makes gold an attractive entry point.
- Rationale:
Crude Oil (Brent Crude Spreads):
- Strategy:
- Long May/June 2025 spreads, short May/June 2026 spreads.
- Rationale:
- Near-term upside due to low valuation and Iranian supply risks.
- Medium-term downside due to increased spare capacity and risks of tariff escalation.
- Strategy:
Natural Gas (Short 2026 European TTF and US Henry Hub):
- Rationale:
- Anticipation of a global LNG supply surge.
- Prices likely to fall below lignite economics to manage storage levels.
- Rationale:
Conclusion:
MUFG’s top trades reflect strategic positioning for key dynamics in 2025, with bullish sentiment on gold, tactical oil spreads, and bearish bets on long-dated natural gas prices.
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