Global Metals Decline After Trump Election Win, While Oil and Agriculture See Partial Recovery
Following Donald Trump’s victory in the U.S. presidential election, metals took the hardest hit among commodities, while oil, gas, and agricultural prices showed signs of recovery. Trump secured the presidency with more than the 270 Electoral College votes required, following a campaign that heightened national divisions.
Oil prices initially dropped by over $2 per barrel due to a stronger dollar, though they later stabilized. Analysts suggested this early decline was an overreaction. Although Trump has been a strong proponent of U.S. oil and gas production and may impose tariffs that could slow economic growth and fossil fuel demand, U.S. production of these resources already reached record levels under former President Joe Biden, according to Jacob Mandel from Aurora Energy Research.
European gas prices also leveled off after a brief rise earlier in the day.
Agricultural commodities rebounded, with corn and wheat turning positive and soybeans reducing earlier losses, supported by a sharp increase in soy oil futures. A stronger dollar makes U.S. grain more costly in global markets, and Trump’s proposed tariffs could impact U.S. agricultural trade, particularly soy exports to China, which might reduce purchases in retaliation. However, with the peak U.S. soy export season ending, any retaliatory impact may not be evident until next summer.
Trump’s tariff policies could also affect biofuel producers, who may face limits on imports of used cooking oil, increasing demand for domestically produced soy oil.
Precious metals continued to decline, with gold at a three-week low and copper down nearly 4%—its largest one-day loss in five months. Zinc was the weakest in the base metals category, as potential challenges loom for China’s steel industry if Trump’s policies boost U.S. domestic manufacturing.
The copper market appears to be pricing in the potential long-term impacts of Trump’s policy direction, according to traders. Trump has pledged to “rescind all unspent funds” from the Inflation Reduction Act, a climate-focused law enacted under the Biden administration that allocates significant subsidies for electric vehicles, renewable energy, and strategic mineral production.
“Gold’s outlook is mixed,” said Ole Hansen, head of commodity strategy at Saxo Bank, “torn between inflation risk, potential slowing of U.S. rate cuts with the rollout of tariffs, and continued demand for safe-haven assets.”
Commodity prices began falling overnight as traders anticipated a Trump win and its potential impact. Hansen added, “Trump’s proposed tariffs could lead to new trade tensions, especially with China, triggering economic disruptions.”
