Bank of America Commodity Forecast

Bank of America (BofA) expects bullish spot returns for aluminum, copper, and nickel over the next six months, alongside gains in industrial metals, silver, Brent crude, natural gas, and agricultural commodities.

However, BofA anticipates negative spot returns for cotton and weak excess returns for zinc, corn, soybean oil, and Kansas wheat.

Commodity returns are under pressure due to contango in several segments, including metals, grains, and natural gas. The premium on natural gas futures significantly eased in November.

Gold and silver futures have shown stretched premiums, trading 1.7% and 2.1% higher, respectively, for one-month contracts.

Looking ahead to 2025, BofA sees cyclical and structural tailwinds for the U.S. economy, predicting 2.3% GDP growth and inflation above 2.5%, which could result in higher terminal interest rates.

However, the bank warns that proposed U.S. trade policies may negatively impact emerging markets and global commodity prices.