Trump’s tariff plan triggers global inflation, rising commodity prices

Commodities prices hold an upward trend amid U.S. President-elect Donald Trump’s tariff statements, which may impose import goods from Mexico and Canada by %25 as well as an additional 10% tariff on goods from China.

The statement fueled concerns that such a move could affect the manufacturing industry worldwide and curb demand for base metals, causing selling pressure. Analysts say that while the monetary easing cycle by central banks worldwide continues, Trump’s policies could disrupt the fight against inflation.

Precious metals

• The ounce price of gold finished the week at a 2.4% decline. Meanwhile, one of the world’s largest gold deposits has been discovered in Hunan province in Central China, which would have long-term effects on gold prices.

• Despite rising due to fueling geopolitical tensions and the depreciation of the U.S. Dollar Index, silver prices fell 1.9% last week, posting its 14-month worst performance in November.

• Palladium prices fluctuated and fell 3.1% last week amid estimates of possible sanctions against Russia. Russian miner Nornickel’s forecast showed that hydrogen synthesis will sustain China’s demand for palladium despite declining consumption due to the surge of electric vehicles, contributing to the price decline.

Base metals

As for base metals, Trump’s tariffs caused base metal prices to fall due to concerns over the effects on the manufacturing sectors and economies of Canada, Mexico, and China, targets of tariffs.

• Copper prices climbed 0.4% last week as analysts said that China’s scrap copper imports are estimated to fall significantly due to increasing trade tensions with the U.S., while Australian mine operator BHP shifted its focus to copper production in response to falling iron ore demand as part of its major projects in Australia.

• Indonesia’s announcement that it would review miner compliance with environmental regulations and other legislation to ensure the sustainability of its natural resources, dragged down nickel prices 1.9%. These reviews are estimated to affect production quotas and lead to changes in nickel supply.

• Aluminum fell 1.9% per pound while lead and zinc increased 2.8% and 3.2%, respectively.

Energy prices

• Brent crude oil dropped by 3.1% after accusations of the violation of the Israel-Lebanon ceasefire. Analysts stated that the postponement of the OPEC+ group’s planned meeting to discuss production policies created uncertainty in the markets and led to decreases.

• Natural gas fell 0.1% at the end of the week after fluctuating due to volatile weather conditions in the U.S. and Europe. The demand for liquefied natural gas (LNG) in Asian countries increased as winter inched closer, putting upward pressure on global LNG prices.

Agricultural goods

• Wheat declined 2.7% as investors reduced their short positions in European wheat futures due to bad weather conditions and growing uncertainties over demand, while Tunisia and Algeria bought 100,000 and 150,000 tons of wheat, respectively, to be delivered in December and January to compensate for the decline in local production.

• Soybeans climbed 0.7% as the E.U. imported 91,201 tons of soybeans last week, surpassing last year’s imports.

• Corn declined 0.5% after the U.S. Department of Agriculture (USDA) announced that Mexico purchased a total of 454,090 metric tons of wheat for 2024, 2025, and 2026 in total.

• Rice prices rose 0.5% on the Chicago Mercantile Exchange.

• Coffee reached a 47-year high with a 6% increase last week on unfavorable weather conditions in Brazil, low production in Vietnam, and a three-year supply deficit. European coffee buyers opted for beans ahead of time to comply with the new E.U. deforestation legislation, while some Brazilian farmers delayed deliveries of this year’s crops.

• Sugar declined 1.3% after India lifted ethanol production restrictions for sugar mills for 2024 and 2025, pressuring sugar prices.

• The ton price of cocoa ended last week with a 3.38% increase.