Global Commodity Markets Surge Amid Trade Tensions and Supply Disruptions

Gold Hits Record High as Investors Seek Safety

Gold has surged past the $3,000 per ounce mark for the first time, driven by economic uncertainty and escalating trade tensions. The price peaked at $3,000.87 before settling at $2,994.50, reflecting investor anxiety over inflation, tariffs, and potential recessions. Central banks, particularly in China, have significantly increased their gold reserves, fueling demand.

Financial analysts see continued strength in gold, with Goldman Sachs raising its year-end forecast to $3,100 per ounce (source). As investors shift towards safe-haven assets, gold is expected to remain a hedge against market volatility.

Oil Prices Rebound as U.S. Imposes Stricter Sanctions

Crude oil prices have seen their first weekly gain in eight weeks, fueled by tighter U.S. sanctions on Russia and Iran. These restrictions are expected to disrupt global oil exports, creating supply concerns. However, a bearish forecast from the International Energy Agency (IEA) has kept prices from soaring too high.

The U.S. Treasury’s new sanctions on Iranian crude exports and limitations on Russian payments have raised questions about potential supply disruptions. Despite these concerns, both nations have managed to keep exports steady in recent months (source).

Trade Policies and Supply Shocks Drive Commodity Volatility

The impact of U.S. trade policies is being felt across multiple commodities:

• Copper Prices Surge – Copper has surged over 20% this year, reaching nearly $4.90 per pound. The rally has been fueled more by tariff-related stockpiling rather than robust economic demand. President Trump’s proposed 25% tariffs on copper, aluminum, and steel have pushed companies to increase their reserves (source).
• Steel and Aluminum Face Global Retaliation – The U.S. decision to impose a 25% tariff on steel and aluminum has sparked retaliatory tariffs from the EU and Canada. The EU is set to implement $28 billion in countermeasures in April, while Canada has already introduced a $29.8 billion tax on U.S. imports (source).
• Fertilizer Trade Sparks Political Debate – Despite sanctions on Russia, fertilizer exports to the EU surged by 33% in 2024, generating billions in revenue for Moscow. Critics argue that Russian leverage over global food production remains a blind spot in sanctions strategy (source).

With supply disruptions, geopolitical conflicts, and economic uncertainty driving commodity markets, investors and policymakers must prepare for continued volatility in 2025.