Synopsis:

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:

1. 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.

2. 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.

3. 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.

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.