Commodity markets saw a widespread decline on Wednesday following Donald Trump’s U.S. presidential election win, with oil, metals, and agricultural goods all retreating as a surging U.S. dollar weighed on prices. The dollar’s one-day rise, its largest since March 2023, compounded fears over potential tariffs and a slowdown in global growth under Trump’s administration.
Oil prices fell by over 1% due to the dollar rally, which made commodities priced in dollars more costly for international buyers. Investors anticipate Trump’s tariff policies could drive inflation, putting pressure on the Federal Reserve to keep interest rates high, which would further strengthen the dollar and suppress commodity demand.
Precious metals also saw declines, with gold dropping to a near three-week low and copper down more than 2%, making it the worst-performing base metal. “Gold is torn between inflation risks and demand for safe-haven assets,” said Ole Hansen, head of commodity strategy at Saxo Bank, adding that tariffs could also slow U.S. rate cuts.
The agricultural sector was similarly affected. Soybean futures, highly reliant on exports to China, traded lower as the possibility of retaliatory tariffs on U.S. agricultural products loomed. Wheat and corn were less impacted but could face renewed trade tensions with China under Trump’s proposed tariffs.
European gas prices dipped nearly 3%, while the copper market priced in the potential rollback of U.S. electrification policies, including subsidies for electric vehicles. This shift could reduce demand for industrial metals, further pressuring copper prices.
Shares in European renewable energy companies also took a hit, as Trump vowed to scrap offshore wind projects through executive action, stoking concerns that a shift in U.S. policy could slow global clean energy investments.
