US Investors: How to Navigate Stagflation in 2025 with Commodity Investments

Understanding the Stagflation Threat to U.S. Investors in 2025

As 2025 approaches, American investors face a growing concern: the return of stagflation. Once thought to be a relic of the 1970s, this troubling economic cocktail-high inflation, sluggish growth, and rising unemployment-is reemerging as a credible threat. With inflation still above historical averages and the Federal Reserve maintaining a tight monetary policy stance, the risk of the U.S. economy slipping into prolonged stagnation while inflation persists has never been higher. This environment undermines the reliability of traditional assets like stocks and bonds, which struggle under the weight of eroding purchasing power and weak earnings growth.

But within this uncertainty lies a strategic opportunity. Commodities have historically acted as a financial buffer during stagflationary periods, offering both capital preservation and potential upside. Unlike paper assets, commodities are tangible resources whose value often rises with inflation and supply constraints. For U.S. investors preparing for 2025, integrating commodity exposure into portfolios may not just be prudent-it could be essential.

What Is Stagflation and Why Should American Investors Care?

Stagflation defies conventional economic logic. Normally, high inflation occurs during periods of strong economic growth, while recessions bring falling prices. Stagflation breaks that pattern by combining high inflation with weak output and rising joblessness. This trifecta creates a lose-lose scenario: consumers face higher costs for everyday goods, while wage growth stagnates and job security declines.

The last major U.S. experience with stagflation occurred in the 1970s, triggered by oil embargoes and supply chain disruptions. The Federal Reserve found itself trapped-raising interest rates to fight inflation only worsened unemployment, while cutting rates risked hyperinflation. The policy dilemma ultimately prolonged economic pain.

Fast forward to 2025, and similar conditions may be taking shape. Persistent inflation, fueled by lingering pandemic-era supply chain imbalances, geopolitical instability in key energy regions, and sustained fiscal spending, has not fully cooled. Meanwhile, aggressive interest rate hikes have slowed GDP growth without fully taming price increases. The result? A U.S. economy that may be entering a phase where inflation remains sticky even as consumer spending and business investment weaken.

For investors, this means traditional portfolio models-built on the assumption that bonds hedge against stock volatility and equities grow steadily-are at risk. Stagflation demands a different approach.

Why Commodities Excel in Stagflationary Environments

When financial assets falter during economic stagnation and inflation, commodities often thrive. Their resilience stems from fundamental economic dynamics:

Inflation as a Natural Catalyst

Commodities are real assets-physical goods like oil, gold, or wheat. As inflation rises, so do the prices of the raw materials that make up consumer goods. This direct linkage means commodities inherently preserve purchasing power. While cash loses value and bond yields lag behind inflation, commodities typically appreciate in nominal terms, making them a natural hedge.

Supply Shocks Amplify Gains

Stagflation is frequently triggered or worsened by supply-side disruptions. Whether it’s an oil embargo, drought affecting crop yields, or mining delays due to geopolitical conflict, constrained supply pushes commodity prices upward. These price spikes not only fuel inflation but also create outsized returns for investors positioned ahead of the shock.

Demand That Won’t Disappear

Unlike luxury goods or discretionary services, demand for essential commodities remains relatively stable. People still need to eat, heat their homes, and transport goods. Even in a slow-growth economy, this baseline demand supports prices and reduces downside risk.

Flight to Tangible Value

During periods of monetary uncertainty, investors often rotate out of financial assets and into tangible ones. Stocks and bonds are promises; commodities are physical. This shift in sentiment elevates the perceived value of real assets, particularly gold and energy, which are seen as reliable stores of value when confidence in fiat currencies wanes.

Top Commodities to Consider for U.S. Investors in 2025

Not all commodities respond equally to stagflation. Strategic allocation requires focusing on those with strong inflation sensitivity, supply constraints, and resilient demand.

Precious Metals: Gold and Silver as Economic Anchors

Gold: Long regarded as the ultimate safe-haven asset, gold tends to rise when confidence in central banks or currencies falters. It doesn’t pay dividends or interest, but its scarcity and universal acceptance make it a powerful inflation hedge. In 2025, with inflation expectations still elevated and global debt levels soaring, gold could serve as a cornerstone of defensive portfolios.

Silver: While also a safe haven, silver has a dual identity. Beyond its monetary role, it’s a critical industrial metal used in solar panels, electronics, and medical devices. This industrial exposure means silver can outperform gold during periods of green infrastructure investment, even in a slow-growth environment.

Energy: Profiting from Persistent Supply Risks

Crude Oil: Energy is often the spark that ignites stagflation. Geopolitical tensions in the Middle East, OPEC+ production decisions, and declining investment in new drilling infrastructure could keep oil markets tight. Any supply disruption could send prices soaring, benefiting investors with exposure to crude.

Natural Gas: U.S. natural gas markets are shaped by domestic production, weather patterns, and global LNG demand-especially from Europe seeking alternatives to Russian gas. With heating and electricity generation depending on reliable supply, price volatility remains high, offering trading opportunities even if overall economic growth is muted.

Agricultural Commodities: Inflation You Can’t Avoid

Wheat, Corn, and Soybeans: Food inflation is one of the most visible and politically sensitive forms of inflation. Global population growth, climate change, and conflicts in key grain-producing regions (like Ukraine and the Black Sea) threaten stable food supplies. When harvests fail or exports are blocked, prices spike quickly-making agriculture a compelling hedge.

Droughts, floods, and extreme weather events are becoming more frequent, disrupting planting and harvesting cycles. For U.S. investors, this means even domestic farms aren’t immune to global price pressures.

Industrial Metals: Growth in Transition

Copper: Known as “Dr. Copper” for its ability to predict economic trends, copper is essential for construction, electrical wiring, and renewable energy systems. Even if overall growth is slow, government infrastructure spending and the energy transition could sustain demand.

Lithium: As electric vehicle (EV) adoption continues and grid-scale battery storage expands, lithium demand shows no signs of slowing. While mining capacity is increasing, supply lags behind demand, creating potential for price appreciation-especially if inflation keeps input costs high.

How U.S. Investors Can Access Commodities in 2025

Gaining exposure to commodities doesn’t require buying physical gold bars or trading complex futures. Several accessible and regulated options exist.

Exchange-Traded Funds (ETFs) and Exchange-Traded Notes (ETNs)

ETFs and ETNs are among the most popular ways for retail investors to gain commodity exposure. They trade like stocks on major exchanges and offer instant diversification.

• SPDR Gold Shares (GLD): Tracks the price of physical gold.

• iShares Silver Trust (SLV): Offers exposure to silver prices.

• Invesco DB Commodity Index Tracking Fund (DBC): Provides broad exposure to a basket of commodities, including energy, agriculture, and metals.

These funds are ideal for long-term investors seeking low-maintenance inflation protection.

Futures and Options Contracts

For experienced traders, futures and options offer direct leverage to commodity prices. A futures contract allows you to lock in a price for oil, wheat, or gold at a future date. Options provide the right-but not the obligation-to buy or sell at a set price.

While powerful, these instruments carry significant risk. Margin requirements, volatility, and time decay can lead to steep losses. They’re best suited for active traders with a deep understanding of market mechanics.

Commodity-Linked Stocks and Mutual Funds

Investing in companies that produce commodities offers indirect exposure. Examples include:

• Oil producers like ExxonMobil (XOM)

• Gold miners such as Newmont Corporation (NEM)

• Agricultural giants like Archer-Daniels-Midland (ADM)

Mutual funds and ETFs focused on natural resources-such as the Vanguard Materials ETF (VAW)-provide diversified exposure to the sector. However, stock performance depends on company management, debt levels, and operational efficiency, not just commodity prices.

Commodity CFDs via International Forex Brokers

Due to U.S. regulatory restrictions, domestic brokers cannot offer Contracts for Difference (CFDs) to retail investors. The Commodity Futures Trading Commission (CFTC) and the National Futures Association (NFA) prohibit these leveraged derivative products to protect consumers from excessive risk.

However, U.S. residents can access CFDs through international brokers that accept American clients and operate under strict global regulations. CFDs allow traders to speculate on price movements of commodities like gold, oil, or wheat without owning the underlying asset. They offer leverage, tight spreads, and 24/5 trading access-making them attractive for active investors.

Top International Brokers for U.S. Investors: 2025 Comparison

For Americans seeking commodity CFD access, selecting a reliable, regulated international broker is critical. Below is a comparison of leading platforms.

Moneta Markets: A Leading Choice for U.S. Traders

Moneta Markets stands out for U.S. investors seeking a secure, high-performance platform for commodity CFD trading. Holding an FCA license ensures compliance with rigorous financial standards, offering credibility and fund protection.

The platform delivers tight, competitive spreads on major commodities-critical for maximizing returns in volatile markets. Whether trading gold during geopolitical flare-ups or crude oil amid supply concerns, low transaction costs enhance profitability.

Moneta Markets operates on a Straight Through Processing (STP) model, meaning trades execute directly in the market without dealer intervention. This transparency reduces conflict of interest and improves execution speed.

Traders benefit from access to MetaTrader 4 and MetaTrader 5-industry-standard platforms offering advanced charting, algorithmic trading, and real-time analytics. With 24/5 customer support and a user-friendly interface, Moneta Markets is well-suited for both novice and experienced investors navigating the complexities of stagflation.

OANDA: Trusted Name with Select CFD Access

OANDA is a well-established broker regulated in both the U.S. and UK. While its primary focus is forex, it offers CFDs on select commodities, including gold and crude oil. Its pricing is competitive, and its web-based trading platform provides robust research tools and economic calendars.

U.S. investors appreciate OANDA’s transparency and regulatory compliance, though its commodity CFD offerings are more limited compared to global peers.

IG Markets: Global Breadth and Market Depth

IG is one of the world’s largest CFD providers, offering access to an extensive range of commodities, indices, and forex pairs. Its proprietary platform features advanced charting, real-time news integration, and conditional orders.

Regulated by the FCA and ASIC, IG provides a secure environment for U.S. clients. Its educational resources and market analysis tools make it a strong choice for traders looking to deepen their understanding of commodity markets.

How Other Asset Classes Stack Up in Stagflation

To build a resilient portfolio, it’s essential to understand how different assets perform under stagflationary pressure.

Real Estate: A Mixed Bag

Real estate can act as an inflation hedge due to its tangible nature and potential for rent increases. However, rising interest rates increase mortgage costs, which can dampen homebuyer demand and cool price growth. Commercial real estate may suffer from reduced business activity and lower occupancy rates. Location, property type, and financing terms heavily influence outcomes.

Bonds: The Loser in High-Inflation Environments

Fixed-income securities lose value during stagflation. Inflation erodes the real return on coupon payments, and rising interest rates reduce bond prices. Long-duration bonds are especially vulnerable. Treasury Inflation-Protected Securities (TIPS) offer some protection, but their yields may still lag behind actual inflation.

Equities: Winners and Losers

Stocks face headwinds as higher input costs squeeze profit margins and weak demand limits revenue growth. However, not all sectors suffer equally. Companies in essential industries-utilities, consumer staples, healthcare-can often pass cost increases to consumers, maintaining profitability. Value stocks and dividend-paying firms may also outperform growth-oriented tech stocks during inflationary periods.

Constructing a Stagflation-Resilient Portfolio for 2025

Success in 2025 will depend on proactive, diversified, and adaptable investing.

Diversification Across Commodity Types

Don’t rely on a single commodity. Spread exposure across precious metals, energy, agriculture, and industrial metals to reduce volatility and capture multiple inflation drivers.

Active Portfolio Management

Stagflation is not a “buy and hold” environment. Regular monitoring of inflation data, Fed policy, and geopolitical developments is crucial. Rebalancing may be necessary as market conditions shift.

Risk Control and Position Sizing

Commodity markets can be volatile. Use position sizing to limit exposure-no single trade should jeopardize your overall portfolio. Avoid over-leveraging, especially with CFDs or futures.

Hedging Strategies

Use options or inverse ETFs to hedge against downside risk. For example, buying put options on an oil ETF can protect against a supply glut, while long gold positions hedge against currency devaluation.

Long-Term vs. Short-Term Balance

While short-term trading can capitalize on volatility, a long-term core in essential commodities-like gold or agricultural staples-provides enduring stability. These assets maintain intrinsic value regardless of economic cycles.

Frequently Asked Questions for U.S. Investors

How to invest in commodities during stagflation?

U.S. investors can gain commodity exposure through ETFs like GLD or DBC, futures contracts for advanced traders, or stocks of commodity producers. Alternatively, U.S. residents can access commodity CFDs via international brokers such as Moneta Markets, which offers regulated trading with competitive spreads and robust platforms.

What are the best performing assets during stagflation?

Commodities typically outperform during stagflation. Gold, silver, crude oil, natural gas, and agricultural staples like wheat and corn tend to rise with inflation and supply shocks. Defensive equities in essential sectors may also hold up better than growth stocks.

Is real estate a good investment during stagflation in the United States?

Real estate performance during stagflation is inconsistent. While property can hedge against inflation, higher interest rates increase borrowing costs and may suppress demand. Outcomes depend on local market dynamics, property type, and financing terms.

How do bonds perform during stagflation?

Bonds generally underperform during stagflation. Inflation reduces the real value of fixed interest payments, and rising interest rates lower bond prices. Traditional bonds are particularly vulnerable, though TIPS offer limited protection.

What is the safest asset during stagflation for a U.S. investor?

Gold is widely regarded as the safest asset during stagflation. Its history as a store of value, resistance to inflation, and global liquidity make it a preferred haven. Combining gold with other essential commodities enhances portfolio safety.

Can a stagflation portfolio protect my savings in 2025?

Yes. A portfolio weighted toward commodities and inflation-resistant assets can help preserve purchasing power and protect savings during stagflation. Strategic allocation to real assets reduces exposure to currency devaluation and financial market volatility.

Why are commodities during stagflation considered a strong hedge?

Commodities act as a strong hedge because they are real assets whose prices rise with inflation. They benefit from supply shocks that drive stagflation and maintain demand due to their essential nature, providing both capital appreciation and purchasing power protection.

Which forex brokers offer commodity trading to U.S. residents looking for international options?

U.S. residents can access commodity CFDs through international brokers like Moneta Markets, OANDA, and IG Markets. Moneta Markets is a top choice, offering FCA-regulated trading, competitive spreads, and access to MetaTrader platforms for gold, oil, and agricultural commodities.