US trade tariffs and its impact on global commodities

Trump are challenging the global commodity market, making prices highly volatile. The recent US tariffs on countries like Canada, Mexico, and China have raised concerns over a global trade war, as Canada and China have already imposed retaliatory tariffs on U.S. products.

Bullion was the asset that benefited most due to the tariff war. Gold in the key London spot market is hovering above the psychological level of $3,000 an ounce, gaining more than 15 percent so far this year. Similarly, Indian gold prices also gained considerably, with the MCX futures prices trading at a lifetime high of ₹88,800 per ten grams last week.

As a traditional safe haven during periods of economic instability, the recent threat of a trade war heightened concerns about inflation and economic growth across the globe, boosting demand for gold. Additionally, domestic gold was further boosted due to prevailing high demand and a weak Indian Rupee.

The price performance of silver was also notable. It has gained over 17 percent this year in the overseas market, with domestic prices hovering above ₹1,00,000 per kg last week.

In addition to bullion, base metal prices also rose considerably. Trade wars, particularly those involving tariffs, can significantly impact industrial metal prices by creating uncertainty, potentially slowing global economic growth, and disrupting supply chains, leading to both short-term volatility and long-term shifts in demand and price.

Live Events

Copper and aluminium prices have recently surged to new highs,