Geopolitical Risks Shake Commodities
With U.S. political discussions hinting at new trade tariffs, commodity markets are on edge. The light global data calendar means focus has shifted to trade tensions.
Commodities Under Pressure
- Steel and aluminium sectors vulnerable to retaliatory tariffs, with existing duties already affecting prices.
- Agricultural commodities like soy, corn, and wheat may see ripple effects from global trade shifts.
- Energy markets, especially oil and LNG, are sensitive to policy disruptions, supply rerouting, and tariff uncertainty.
Analyst Perspectives
- Markets expect heightened volatility, with key exposure in base metals, grains, and energy.
- Risk hedging via gold, agriculture, and inflation-protected assets is gaining traction.
- Companies and investors are closely monitoring supply chain costs and trade policy updates.
Outlook for Traders
- Potential tariffs may strengthen the dollar and pressure emerging market currencies.
- Commodity hedging will become crucial if policies trigger global inflation.
- Remaining nimble with portfolio allocation and timeline scenarios will help manage risk.
Commodity markets are entering a period of elevated risk due to political uncertainty. Traders should stay informed, hedge strategically, and avoid overexposure to volatile segments.