US President-elect Donald Trump’s comments about potentially imposing a 25% tariff on all products from Mexico and Canada, along with an additional 10% tariff on Chinese goods, sent shockwaves through the commodity markets last week. Rising political and geopolitical tensions worldwide further complicated price forecasts.
The announcement raised concerns that such measures could impact the global manufacturing industry, reducing demand for base metals and exerting downward pressure on prices.
Analysts suggest that while central banks around the world continue easing monetary policy, Trump’s proposed tariffs could undermine efforts to control inflation.
Meanwhile, a major gold discovery in Hunan province, China, is expected to have long-term effects on gold prices. The price of gold fell at the start of the week after reports of a ceasefire between Israel and Lebanon, but rose later in the week as Israel reported a breach of the ceasefire in southern Lebanon, boosting gold prices due to its status as a safe haven. Gold finished the week down 2.4%.
Silver dropped 1.9% last week, despite rising geopolitical tensions and a weaker US Dollar Index, marking its worst performance in 14 months.
Palladium saw fluctuations and fell 3.1% amid speculations about potential sanctions on Russia. However, Russia’s Nornickel forecast suggested that demand from China, driven by hydrogen synthesis, would help sustain palladium prices, despite a decline in consumption due to the rise of electric vehicles.
Trump’s proposed tariffs led to a fall in base metal prices, driven by concerns over the impact on manufacturing sectors in Canada, Mexico, and China, which are the targets of the tariffs.
Copper increased by 0.4% as analysts forecast a sharp drop in China’s scrap copper imports due to growing trade tensions with the US. Australian mining giant BHP also shifted its focus to copper production in response to declining iron ore demand. Nickel fell 1.9% after Indonesia announced a review of mining compliance with environmental regulations, which could affect production quotas. Meanwhile, aluminum fell 1.9% per pound, while lead and zinc rose by 2.8% and 3.2%, respectively.
In the energy sector, Brent crude oil dropped 3.1% following allegations of violations of the Israel-Lebanon ceasefire. The postponement of an OPEC+ meeting on production policies added uncertainty, leading to price increases.
Natural gas fell by 0.1% after fluctuating due to volatile weather conditions in the US and Europe, though increasing demand for liquefied natural gas (LNG) in Asia put upward pressure on global LNG prices.
In the agricultural sector, wheat fell 2.7% as investors reduced short positions in European wheat futures due to adverse weather and uncertainty over demand. Tunisia and Algeria purchased significant amounts of wheat to compensate for reduced local production. Soybeans rose 0.7% as the EU increased its soybean imports. Corn declined 0.5% after the US Department of Agriculture announced that Mexico had purchased a large quantity of wheat for the coming years.
Rice rose 0.5% on the Chicago Mercantile Exchange, while coffee surged 6%, reaching a 47-year high due to unfavorable weather in Brazil, low production in Vietnam, and a three-year supply deficit. European coffee buyers purchased beans in advance to comply with new EU deforestation laws, and Brazilian farmers delayed deliveries of this year’s crops.
Sugar dropped 1.3% after India lifted ethanol production restrictions for sugar mills in 2024 and 2025, exerting downward pressure on sugar prices. Cocoa ended the week up 3.38%.
