Commodity prices mixed after Trump win last week

• Devastating Hurricane Rafael in Gulf of Mexico leads to Brent oil, natural gas supply concerns

ISTANBUL

Commodity prices followed a mixed course last week after Republican Donald Trump was elected the 47th president of the US on Nov. 6.

While the demand for the US dollar increased, Trump’s economic policies are estimated to limit the decline in inflation in the coming period.

Asset prices in general came under pressure as the US Dollar Index rose after the presidential elections.

Analysts said that international trade may be affected by Trump, especially due to his emphasis on tariffs, and noted that this situation is one of the factors that increase the pressure on asset prices and the commodity market.

They said that the effect of Trump’s policies may fuel inflationary pressures and the Fed may continue its rate cut cycle slower than expected.

The Fed cut its interest rates by 25 basis points during its November meeting to the range of 4.50%-4.75% – the second rate cut this year came in line with expectations.

The Fed stated that the latest indicators point to robust and rapidly continuing economic activity in the country, and while inflation remains relatively high, it is slowly declining to the 2% target. Fed Chair Jerome Powell said the US presidential elections will not impact policy decisions in the near term.

Gold declines from historic highs

Gold fell 1.8% per ounce last week after Trump won the US presidential elections, the fastest weekly decline since the week of May 20, while silver declined 3.7% per ounce, platinum 2.5%, and palladium 8%.

Base metals declined except for aluminum and nickel last week. Trump may impose sanctions on China despite the country’s efforts to stimulate its economy to mitigate the effects of possible sanctions.

The pound prices of copper and lead fell 0.7%, and zinc 1.6%, while nickel rose 2.1% and aluminum 1%.

Energy group on rise

The barrel price of Brent crude oil climbed 1.4% as Trump’s expected positivity toward US-based oil producers came to the fore. His future policies on oil production are estimated to increase the economic activity in the US, which is the world’s largest oil consumer.

Meanwhile, regulators in the world’s largest oil importer, China, requested banks to lower the interbank deposit rates to stimulate the country’s economy, which contributed to oil demand.

The OPEC+ group’s announcement that they would wait a little more to increase oil production and the ongoing tensions in the Middle East pushed oil prices upward.

The daily crude oil production in the US fell, which increased supply concerns of Brent crude oil.

Trump is in a dilemma between tariffs and the low inflation promises he made to the public and he plans to reduce energy costs as a solution, analysts say.

They noted that a more hawkish stance against Iran may be seen under Trump’s second term and oil sanctions may be applied more strictly to the country.

Meanwhile, Hurricane Rafael in the Gulf of Mexico halted about 304,000 barrels of daily oil production, according to the Bureau of Safety and Environmental Enforcement (BSEE), leading to supply concerns for Brent crude oil and natural gas.

The natural gas traded on the New York Mercantile Exchange increased 0.1% last week.

Agricultural group on rise except for sugar, rice

Rice prices fell 3.1% per bushel last week on reports that rice stocks in India rose, while sugar declined 1.3% due to above-average monsoon rains in India easing supply concerns.

Cocoa rose 0.7% per ton on continuing dry weather in Brazil and heavy rain concerns in Vietnam, while in the Ivory Coast, exporters rejected poor quality cocoa beans, which could negatively impact the global cocoa supply, in addition to the decrease in the cocoa harvest in the country.

*Writing by Emir Yildirim