US Market Strategy: Top Commodities to Combat Stagflation in 2025

Introduction: Understanding Stagflation and Its Impact on US Investments in 2025

Stagflation-a troubling mix of high inflation, stagnant growth, and rising unemployment-is reemerging as a top-tier concern for American investors preparing for 2025. Unlike typical recessions or inflation spikes, stagflation creates a policy and investment paradox: rate hikes meant to cool inflation can further depress growth, while stimulus to boost the economy risks accelerating price increases. The last time the U.S. faced this challenge head-on was in the 1970s, when soaring oil prices, wage-price spirals, and loose monetary policy combined to erode household wealth and undermine investor confidence. With lingering supply chain fragilities, shifting global trade dynamics, and an uncertain Federal Reserve path ahead, the risk of a repeat scenario is no longer theoretical.

Today’s environment isn’t identical to the 1970s, but parallels are hard to ignore. Wages are under pressure, core inflation remains stubbornly above target, and GDP growth is decelerating. In this climate, traditional 60/40 portfolios-balanced between stocks and bonds-may falter. Equities suffer from multiple contractions amid higher rates and weak earnings, while nominal bonds lose real value when inflation runs hot. That’s why forward-thinking U.S. investors are turning to alternatives that historically thrive when the economy stumbles under inflationary strain.

Why Commodities Shine During Stagflation in the United States

Commodities have consistently outperformed traditional assets during past stagflationary periods, and for good reason: they are real, tangible goods whose value isn’t tied to financial promises or interest rate assumptions. When the dollar weakens and prices rise, commodities often move in tandem with inflation, acting as a built-in hedge against purchasing power erosion.

Unlike stocks and bonds, which are priced in nominal terms, commodities are priced in the very currency that’s losing value-meaning their appreciation often reflects the rising cost of production, transportation, and scarcity. Even in a slow-growth environment, demand for essential raw materials like energy, food, and metals tends to remain stable. Think of gasoline for commuting, wheat for bread, or copper for electrical wiring-these aren’t discretionary purchases that disappear during downturns.

Moreover, supply constraints can amplify price gains regardless of economic momentum. Geopolitical instability in key producing regions, climate-related disruptions to crop yields, or underinvestment in mining and energy infrastructure can all tighten markets. The U.S., despite being a major energy producer and agricultural exporter, is not immune to global supply shocks. This makes commodity exposure not just a speculative play, but a strategic tool for capital preservation in uncertain times.

Top Commodities for US Investors to Consider During Stagflation in 2025

As inflation pressures persist and economic expansion stalls, a targeted allocation to specific commodities can strengthen portfolio resilience. Below are the most compelling categories for U.S. investors eyeing 2025, each offering unique inflation-hedging properties and structural demand drivers.

Precious Metals: Gold and Silver

Gold remains the gold standard-literally and figuratively-for financial protection during economic turbulence. Its value isn’t tied to any government’s balance sheet, and it has no counterparty risk. When confidence in fiat currencies wanes, investors flock to gold as a store of value. Historical data from the World Gold Council shows gold has maintained or increased purchasing power during every major U.S. inflation surge since the 1970s World Gold Council.

Silver shares gold’s safe-haven appeal but adds an industrial dimension-used in solar panels, electronics, and medical devices-giving it dual demand drivers. While more volatile than gold, silver can offer amplified returns in commodity bull markets.

U.S. investors can access both metals through physical bullion, IRS-approved precious metals IRAs, ETFs like SPDR Gold Shares (GLD) and iShares Silver Trust (SLV), or futures contracts traded on the COMEX.

Energy Commodities: Crude Oil and Natural Gas

Energy prices directly influence headline inflation. Transportation, heating, and manufacturing all rely on oil and gas, making them inflation accelerants-and, by extension, inflation hedges. Even during low-growth periods, demand for energy doesn’t vanish. Commutes continue, homes need heat, and industries require power.

Geopolitical risks-from Middle East conflicts to sanctions on Russian exports-can trigger sharp supply shortages. At the same time, U.S. domestic production may face headwinds from regulatory shifts or environmental policies limiting drilling permits. These dynamics create a floor under prices, especially if global inventories remain tight.

Investors can gain exposure via the United States Oil Fund (USO), the ProShares Ultra Bloomberg Crude Oil ETF (UCO), or natural gas-focused ETFs like the United States Natural Gas Fund (UNG). Alternatively, investing in high-quality energy producers with low breakeven costs offers leveraged equity exposure.

Agricultural Commodities: Grains, Livestock, and Softs

Food is non-negotiable. Whether the economy is booming or contracting, people must eat. This inelastic demand makes agricultural commodities a powerful hedge against food price inflation, which has been a major contributor to recent CPI increases.

Corn, wheat, and soybeans are foundational to both human and animal diets. Droughts, floods, and export restrictions can severely disrupt supply chains. For instance, prolonged droughts in the Midwest or Black Sea region can send grain prices soaring. Similarly, coffee, sugar, and cocoa-often classified as “softs”-are vulnerable to weather shocks and rising labor costs.

Livestock markets, including cattle and hogs, are sensitive to feed costs (linked to corn and soy) but benefit from strong consumer demand for protein. With climate change increasing the frequency of extreme weather events, agricultural volatility is likely to persist.

The Invesco DB Agriculture Fund (DBA) offers diversified exposure across multiple agricultural futures, while specialized traders can access individual contracts on the CME Group exchanges.

Industrial Metals: Copper and Aluminum

Copper is often called “Dr. Copper” for its ability to diagnose economic health. It’s a critical component in construction, manufacturing, and the clean energy transition-from electric vehicle wiring to solar panel infrastructure. Aluminum, similarly, is indispensable in transportation, packaging, and aerospace.

While industrial metals are cyclical and tied to economic output, their role in long-term structural trends like electrification and infrastructure modernization provides a demand tailwind-even during sluggish growth. The Biden administration’s infrastructure spending, coupled with global decarbonization goals, supports sustained demand.

China’s industrial activity remains a key price driver, but U.S. reshoring efforts and domestic clean energy incentives are creating new baselines for consumption. For investors, industrial metals can be accessed through ETFs like the iPath Bloomberg Copper Subindex Total Return ETN (JJC) or via equities in major mining firms like Freeport-McMoRan or Alcoa.

How US Investors Can Invest in Commodities During Stagflation (2025)

There’s no one-size-fits-all approach to commodity investing. Each method comes with trade-offs in liquidity, cost, control, and risk. U.S. investors should choose based on their experience level, portfolio goals, and risk tolerance.

Direct Commodity Ownership

Buying physical gold or silver bars, coins, or rounds gives investors full ownership and eliminates counterparty risk. This method is particularly popular among those prioritizing asset privacy and long-term wealth preservation. However, it introduces logistical challenges: secure storage (home safes, bank vaults, or third-party depositories), insurance costs, and lower liquidity compared to exchange-traded products.

For larger holdings, allocated storage with a reputable custodian is advisable. Some self-directed IRAs also allow physical precious metals, subject to IRS purity and sourcing rules.

Commodity Futures and Options

Futures contracts allow investors to lock in prices for future delivery of commodities like oil, wheat, or copper. They’re traded on regulated U.S. exchanges such as the CME Group and are overseen by the Commodity Futures Trading Commission (CFTC). Options on futures provide the right-but not the obligation-to buy or sell at a set price, offering flexibility and defined risk.

These instruments are highly leveraged, meaning small price movements can lead to outsized gains or losses. They require active management and a solid grasp of roll yields (the cost of rolling expiring contracts forward) and contango/backwardation dynamics. Best suited for experienced traders.

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

ETFs are the most accessible route for retail investors. Most commodity ETFs either hold physical assets (like GLD) or a basket of futures contracts (like USO). They trade like stocks on major exchanges, offer intraday pricing, and provide instant diversification.

ETNs, such as the JPMorgan Alerian MLP Index ETN (AMJ), are unsecured debt securities linked to commodity indices. While they track performance accurately, they carry issuer credit risk-unlike ETFs, which hold underlying assets.

For broad exposure, consider the iShares GSCI Commodity-Indexed Trust (GSG), which tracks a diversified index of energy, agriculture, and metals.

Commodity-Related Stocks and Mutual Funds

Investing in producers offers indirect but often amplified exposure to commodity prices. A mining company’s stock may rise faster than gold itself due to operating leverage. Similarly, oil drillers benefit from higher crude prices while managing fixed production costs.

Mutual funds and ETFs focused on natural resources-such as the Vanguard Energy ETF (VDE) or T. Rowe Price New Horizons Fund-provide diversified exposure to a basket of commodity-linked equities. These can also deliver dividend income, adding yield to the portfolio.

Investing in Commodities with Forex/CFD Brokers in the United States

While CFDs (Contracts for Difference) are not available through U.S.-regulated brokers due to SEC and CFTC restrictions, many American investors access global commodity markets through offshore platforms that comply with international standards. These brokers allow leveraged trading on spot prices and futures contracts for gold, crude oil, natural gas, and agricultural commodities.

It’s critical to choose a broker regulated by a top-tier authority like the UK’s Financial Conduct Authority (FCA). Moneta Markets, for example, holds an FCA license and offers U.S. clients access to a wide array of commodity CFDs with competitive spreads and advanced platforms including MetaTrader 4 (MT4), MetaTrader 5 (MT5), and a proprietary WebTrader. This makes it a viable option for sophisticated investors seeking global diversification and flexible trading tools.

Note: Leverage magnifies both gains and losses. Traders must use risk management tools like stop-loss orders and position sizing to protect capital.

Top Brokers for Commodities Trading in the United States (2025)

Selecting the right broker can significantly impact trading success, especially when navigating volatile commodity markets. Here are three platforms favored by U.S. investors for their reliability, tools, and market access.

Moneta Markets

Moneta Markets is a top choice for U.S. investors looking to trade commodity CFDs with international exposure. Regulated by the Financial Conduct Authority (FCA), it offers tight spreads on gold, silver, crude oil, natural gas, and key agricultural products. Its integration with MT4, MT5, and a customizable WebTrader platform provides advanced charting, algorithmic trading capabilities, and fast execution. With strong customer support and transparent pricing, Moneta Markets caters to both active traders and those building diversified commodity positions.

IG

IG is one of the world’s largest CFD and forex brokers, known for its deep market access and robust research tools. It offers over 17,000 markets, including a comprehensive suite of commodity CFDs. IG’s proprietary platform features advanced technical analysis, sentiment indicators, and real-time news feeds-ideal for traders who rely on data-driven decisions. Its long-standing reputation and global compliance framework make it a trusted option for U.S. clients trading offshore.

OANDA

OANDA has built a strong presence among U.S. traders for its transparency, user-friendly interface, and competitive pricing. While best known for forex, it also provides access to major commodity CFDs, including gold, oil, and silver. The platform emphasizes ease of use, educational resources, and clear fee structures-making it well-suited for beginners and intermediate investors. OANDA is regulated by multiple authorities, including the CFTC for U.S. operations, ensuring high standards of client protection.

Crafting a Stagflation-Resistant Portfolio for US Investors in 2025

A stagflation-resistant portfolio shouldn’t rely solely on commodities, no matter how effective they are as hedges. True resilience comes from strategic diversification across asset classes that perform well under different economic regimes.

Consider allocating 10%-20% of your portfolio to commodities, split among precious metals, energy, and agriculture. Pair this with Treasury Inflation-Protected Securities (TIPS), which adjust principal based on CPI changes, offering a government-backed inflation hedge. Real assets like real estate investment trusts (REITs)-especially those in industrial, storage, or multi-family housing-can also provide inflation-linked rental income.

Equity exposure should tilt toward value and dividend-paying stocks in sectors with pricing power: consumer staples (e.g., Procter & Gamble), utilities (e.g., NextEra Energy), healthcare (e.g., Johnson & Johnson), and energy producers. These companies can pass cost increases to consumers, protecting margins even in high-inflation environments.

Regular rebalancing is essential. As commodity prices rise, their share of the portfolio may grow disproportionately, increasing volatility. Rebalancing locks in gains and maintains target risk levels. Monitoring key indicators-like CPI, PPI, unemployment claims, and Fed rate decisions-helps inform timely adjustments.

Risks and Considerations for Commodity Investing in the US (2025)

Commodities are not a risk-free haven. Their prices can swing wildly based on unexpected supply shocks, weather patterns, or shifts in monetary policy. Gold may rally on inflation fears, only to retreat if the Fed signals aggressive tightening. Oil can spike on Middle East tensions, then collapse if OPEC+ increases output.

Leverage, while powerful, can lead to margin calls and catastrophic losses if used imprudently. Futures traders must account for contango-when future prices exceed spot prices-leading to negative roll yields. Physical ownership brings storage and insurance costs that erode returns over time.

Regulatory risk also looms. Changes in U.S. environmental policy could impact fossil fuel investments, while agricultural subsidies or trade tariffs can distort crop markets. Additionally, geopolitical tensions may lead to sanctions or export bans, disrupting supply chains.

Investors should assess their time horizon, liquidity needs, and emotional tolerance for volatility. Commodities work best as a long-term hedge, not a short-term speculation. Staying informed through reliable sources-like the U.S. Energy Information Administration (EIA), USDA reports, and Federal Reserve announcements-is critical Federal Reserve.

Conclusion: Positioning for Resilience in a 2025 US Stagflationary Environment

As 2025 approaches, the possibility of stagflation demands more than passive investing-it calls for proactive strategy. Commodities, with their tangible value and inflation-resistant qualities, offer a proven defense against the erosion of purchasing power. From gold’s enduring appeal to oil’s structural role in the economy, each commodity class brings unique strengths to a well-constructed portfolio.

U.S. investors have more tools than ever to access these markets: ETFs for simplicity, futures for precision, and global brokers like Moneta Markets for expanded reach and advanced functionality. When combined with TIPS, value equities, and real assets, commodities form the backbone of a stagflation-resilient strategy.

Success won’t come from chasing price spikes, but from disciplined allocation, continuous monitoring, and a clear understanding of risk. By preparing now, American investors can position themselves not just to survive economic turbulence, but to emerge stronger.

How to invest in commodities during stagflation in the United States?

US investors can invest in commodities during stagflation through various avenues, including buying physical assets (like gold or silver bullion), investing in commodity-focused Exchange-Traded Funds (ETFs) or Exchange-Traded Notes (ETNs), trading commodity futures or options contracts, or by investing in stocks of companies involved in commodity production (e.g., mining or energy firms). For diverse exposure to spot and futures CFDs, international brokers like Moneta Markets can also be considered, offering a wide range of assets and robust trading platforms.

What are the best commodities during stagflation for a US portfolio?

For a US portfolio facing stagflation in 2025, the best commodities often include:

• Precious Metals: Gold and silver, acting as traditional safe havens and inflation hedges.
• Energy Commodities: Crude oil and natural gas, due to essential demand and direct links to inflation.
• Agricultural Commodities: Grains, livestock, and softs, given their inelastic demand as essential goods.
• Industrial Metals: Copper and aluminum, driven by infrastructure and green energy demand.

What is the safest asset during stagflation for US investors?

While no asset is entirely “safe,” gold is widely considered one of the safest assets during stagflation for US investors. Its historical performance shows it tends to hold value or even appreciate when inflation is high and economic growth is low, acting as a reliable store of value independent of currency fluctuations.

What are the best investments during stagflation beyond commodities for Americans?

Beyond commodities, US investors should consider:

• Treasury Inflation-Protected Securities (TIPS): Government bonds designed to protect against inflation.
• High-Quality Dividend Stocks: Companies with strong balance sheets and pricing power that can pass on costs.
• Certain Real Estate: Especially properties with inflation-linked rental agreements or essential services.
• Value Stocks: Companies trading below their intrinsic value, which may offer more resilience than growth stocks.

How does real estate perform during stagflation in the US?

Real estate performance during stagflation in the US can be mixed. While property values might initially benefit from inflation, high interest rates (often used to combat inflation) can curb demand and increase borrowing costs. Essential real estate sectors, like multi-family residential or industrial properties with inflation-linked leases, may fare better than speculative or commercial properties.

What does a typical stagflation portfolio look like for a US investor?

A typical stagflation portfolio for a US investor would likely emphasize:

• A significant allocation to commodities (e.g., gold, oil, agriculture).
• Exposure to TIPS and other inflation-indexed securities.
• Investments in companies with strong pricing power and stable cash flows (e.g., consumer staples, utilities, healthcare).
• A strategic allocation to real estate (potentially via REITs or direct ownership).
• A lower allocation to traditional growth stocks and long-duration bonds, which tend to struggle in such an environment.

Are commodities during stagflation a good hedge for US retirement funds?

Yes, commodities can be a valuable hedge for US retirement funds during stagflation. They offer diversification and protection against inflation, which can significantly erode the purchasing power of retirement savings. However, due to their volatility, commodities should be part of a broader, diversified retirement strategy, not the sole investment. Consulting a financial advisor for personalized advice is recommended.

What are the best stocks for stagflation in the United States market?

For the United States market during stagflation, the best stocks tend to be in sectors with inelastic demand and strong pricing power. These include:

• Consumer Staples: Companies selling essential goods (e.g., food, beverages, household products).
• Utilities: Providers of essential services (e.g., electricity, water).
• Healthcare: Companies in pharmaceuticals, medical devices, and services.
• Energy and Materials: Companies directly involved in commodity production, which often benefit from rising raw material prices.

When considering individual stocks or commodity CFDs, platforms like Moneta Markets can offer access to a range of instruments that align with these strategies, including energy and precious metals.