The US President’s tariff policy Donald Trump has upset global goods markets, whether it is precious metals -as gold-, Oil, Aluminum or for agricultural products -almost no sections have escaped from its announcements and measures.
The result of Trump policy is intense price fluctuations in gold, shifted trade flows and new risks to producers and traders, according to Handelsblatt.
After taking his duties, Trump, gold continued his upward trend from the previous year, even breaking the $ 3,500 threshold for the first time. One of the reasons for this was the US trade war.
Concerns about the impact of US duties have turned both Western and Chinese investors in the safe gold refuge.
But Trump’s tariff policy not only increased the price of gold, but also disturbed the gold market: at times, gold negotiated up to $ 100 more expensive in the US than in London.
Gold prices are usually the same in New York and London. Natural wholesale gold is usually held in London, while future gold contracts are traded on the New York Stock Exchange (COMEX).
But because traders and banks were afraid of potential gold import duties from the US, tons of gold crossed continents in the spring. The shares in the New York comex have reached record levels. Eventually, the gold market returned to normal because the scared tariffs were not imposed.
Silver was also temporarily negotiated in New York at a higher price than on the spot market in London. This suddenly became a profitable transfer of the precious metal to New York with air transport instead of the usual mission method.
The platinum market, however, continues to face duties associated with duties. Interest rates on white precious metal are more than twice as much as they were in April and at some point they even reached the historical high of 37%.
Banks lend precious metals such as platinum to companies and interest with interest. This protects them from price fluctuations.
It remains uncertain as to whether US exemption from tariffs on precious metal bars will also apply to so -called platinum metals, such as platinum and palladium.
However, the price of platinum itself has also increased temporarily. One of the reasons is concerns about possible congestion points in the offer from Russia, which represents between 10 and 15 percent of the world offer. The same is true of Palladium, whose Russia is the largest producer. Trump threatens to impose secondary tariffs on buyers of Russian products.
1. Oil and natural gas
US secondary duties are also likely to have a greater impact on the oil market. US President Trump imposed these duties in India because the country imports large quantities of Russian oil.
According to the International Energy Organization (IEA), India buys nearly two million barrels of Russian oil a day, more than one -third of total oil imports. Now the country has to look for other sources of oil – although experts do not expect India to be able to completely abandon oil from Russia. As a result, oil traders have so far taken a little bit of the risk of lack of supply due to secondary duties.
The price of Brent crude oil just managed to exceed $ 70. This is partly due to the expansion of production by the enlarged OPEC+oil cartel, which includes Russia. It is also due to US duties, which prevent economic growth and, consequently, consumption of oil.
Natural gas prices also suffer from duty -related recessions. However, gas prices in Europe have been temporarily become more expensive, also due to the announced secondary duties for countries importing Russian energy products.
2. Metals
Trump introduced import duties to many metals. Perhaps the biggest impact, however, was a duty announcement that was later not fully implemented: in July, Trump announced that it would impose 50% duties on copper imports.
As a result, the price of copper in the US increased to a historic high and at times it was 30% higher than the price of London. Industrial metal is normally traded at similar prices on both stock markets. However, traders introduced tons of copper to the US in the weeks ago, after it became known that the US was considering copper duties.
Then, in early August, the reversal came: Trump clarified that the ores and copper condenses would not be subject to duties, but only copper products, such as cables.
The price of copper in the US was then reduced by over 20% – the largest drop since 1988. The difference between prices in New York and London has almost disappeared completely.
However, Trump adopted a serious approach to two other metals: aluminum and steel. Initially, Trump imposed a 25% import duties on them and in early June increased the duties to 50%. In August, the US government expanded duties to more than 400 products containing aluminum or steel.
As a result, the premium for natural aluminum traditions to the US was temporarily expanded to $ 1,560 per tonne. This is almost eight times higher than in Europe, writes Commerzbank analysts, Karsten Fritz and Barbara Lambrecht. At the beginning of the year, these regional premiums, which buyers have to pay in addition to the exchange price to truly acquire aluminum, were almost the same.
According to UBS resolution, steel duties could lead to higher prices in the US for the intermediate product, the level of hot rolled steel in roles. In the medium term, US steel producers could increase their productive capacity. At the global level, however, steel duties are likely to reduce the growth and demand for iron ore, from which steel is produced.
3. Agricultural products
The prices of several agricultural products were also disturbed by Trump’s duties. For example, orange juice: The 50% duty announcement on imports from Brazil, the most important US oranges supplier initially caused a sharp increase in prices. When Trump later withdrew and announced only 10%duties, prices declined again.
Imports from Brazil also led to rising coffee prices. The price of the Arabica grains, which are largely grown in Brazil, rose to a high ten -week high last week.
In addition to duties, potential frost losses to a Brazilian cultivation area also led to the rise in prices. Coffee stocks on the US Stock Exchange (Ice) have been reduced to the lowest level of the last 15 months in mid -August, according to analyst Fritsch.