Global Commodities React to U.S. Tariffs with Oil Drop, Gold Surge

Oil Slides, Gold Soars as Investors React to Economic Uncertainty

Global commodity markets are reeling from the ripple effects of President Donald Trump’s newly imposed tariffs, unveiled on April 3, 2025. While energy commodities like oil and gas were spared from the tariffs, market sentiment has been anything but calm. Crude oil prices fell sharply, with Brent crude dropping $1.97 to $72.98 per barrel and West Texas Intermediate (WTI) falling $2.01 to $69.70. Traders are responding to fears of slowing global economic growth that could reduce fuel demand.

Adding to the tension, the Russian central bank issued a cautionary statement noting that the tariff escalation may fuel global inflation and undercut growth—two forces that typically exert downward pressure on oil prices. This dovetails with a broader market narrative expecting recession-like conditions in the coming quarters, reducing demand for industrial commodities across the board.

In contrast, gold has emerged as a clear winner amid the turmoil. Investors poured into the precious metal as a safe haven, pushing gold prices to a record high of $3,167.57 per ounce. HSBC responded by raising its gold outlook, predicting average prices of $3,015 in 2025 and $2,915 in 2026. Geopolitical tensions, inflation fears, and equity market volatility have all reinforced gold’s traditional role as a portfolio stabilizer.

Read Bloomberg’s full analysis of the gold surge and inflation outlook.

Metal and Agriculture Commodities Face Supply Chain and Demand Shocks

In the industrial metals market, copper has become a flashpoint for logistical and pricing volatility. The CME spot copper price hit a record $5.277 per lb, driven by expectations of new U.S. tariffs and supply chain constraints. However, prices on the London Metal Exchange (LME) lagged, as traders scramble to meet U.S. requirements for deliverable copper brands. This mismatch is disrupting usual flows and injecting uncertainty into global pricing mechanisms.

Meanwhile, the agriculture sector is experiencing a realignment in trade routes. Ukraine, in particular, is poised to capitalize on the shift. As U.S. agricultural products face higher import costs due to retaliation or reduced competitiveness, buyers are turning to Ukrainian corn, which offers logistical stability and favorable pricing. Analysts suggest Ukraine could significantly increase market share in several key importing regions.

At the same time, coffee and cocoa prices have dipped amid concerns that American consumer demand could soften under the weight of broader economic pressure and costlier imports. These commodities are highly sensitive to demand trends in the U.S., the world’s largest coffee market.

For more on shifting global agricultural trends, check out Reuters’ commodity insights.

The current shake-up across commodities underscores the far-reaching consequences of a shifting U.S. trade strategy. From energy and metals to grains and softs, markets are recalibrating quickly. In the coming weeks, traders and policymakers alike will be watching for signs of stabilization—or further escalation.