Commodity prices volatile, while gold, silver, copper, and coffee on rise in Q1

ISTANBUL

Commodity prices have been volatile in the first quarter of the year due to tariff concerns and uncertainties over the global economy, while sharp rises in gold, silver, copper, and coffee have come to the fore.

US President Donald Trump’s tariffs fuel concerns that the trade wars may deepen, while China’s improvements in industrial activity have impacted prices.

Analysts say that China’s weakness in domestic demand is one of the major risks to its economy, as the debt risk of local governments and the declining real estate sector affect the country.

China’s exports slowed down in the first two months of the year as Washington’s tariffs came to the fore, while Beijing’s moves to encourage banks to provide personal consumption loans positively influenced the commodity market.

Positive macroeconomic data from China offset concerns over weakening demand amid escalating trade wars, while China’s restriction of US agricultural imports to the country pressures grain prices, and global demand concerns impacted Brent crude oil.

Analysts note that the fall of globalization and the coming of trade protectionism could fuel inflationary pressure and accelerate the long-term demand for industrial metals, energy, and agricultural products.

Meanwhile, gold soared 19.1% per ounce in the first quarter on economic growth concerns due to its safe-haven feature, while Trump’s statements on saving the US auto industry pushed palladium and platinum up 10.2% and 8.2%, respectively, and silver rose 10.2% per ounce.

Copper increased 26% per pound in the first quarter, reaching a record high of $5.33, as China’s industrial activity improved and Beijing’s stimulus packages left a positive impact, while Trump’s moves to impose a 25% copper tariff came to the fore.

Lead climbed 3.2% and nickel 3.6% per pound, while aluminum fell 0.8% and zinc 4.5%.

At the same time, Brent crude oil fell 0.2% per barrel after the OPEC+ group released its plan to boost production, the International Energy Agency forecast a 600,000-barrel surplus this year and Russia agreed to halt attacks on energy infrastructure for 30 days.

Natural gas fell 13.4% per MMBtu in the first quarter of the year.

As for agricultural commodities, wheat declined 2.6% per bushel, corn 0.3%, and rice 5.2% as China put tariffs on a range of US products, including these, while a drop in corn imports led to demand concerns. Soybean climbed 0.4%.

Coffee hit a record of $4.2995 per pound, up 18.8%, while sugar fell 2% and cotton 2.3%, and the ton price of cocoa declined 32.3%.

Zafer Ergezen, a futures and commodity markets expert, told Anadolu that gold’s ounce price has been going on strong for a while but the rising trend started in July, led by reports that central banks would go for rate cuts, while the war in Ukraine and the tensions in the Middle East, as well as Trump’s win in the presidential race, contributed to the rise.

Ergezen noted that silver is relatively lagging behind due to its heavy use in industry, while copper demand was positively impacted by China’s breakthrough in electric vehicles (EVs).

“Renewable energy has come to the fore, and China’s incentives led to a stronger demand for copper, especially in the auto sector—these are some of the factors leading to rising copper demand,” he said.

“Reports showed that there was already a general expectation that copper demand would rise, and from this point on, I can say that if there is to be an upward trend in industrial metals, copper will lead that rise.”