Commodity Calls: Week Ending 28 February 2025

Copper prices spike in New York as traders capitalise on arbitrage, gold falls on bullish dollar as Trump’s tariffs loom, and Russia lobbies for US to lift sanctions on energy exports.

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Copper

Bullish

• Copper prices spiked in New York as traders rushed to transport the metal back to the US.¹ Copper futures in the US traded at premiums of US$1000 above the London Metals Exchange after President Trump ordered a sweeping examination of possible copper tariffs. This meant traders could benefit from selling into the arbitrage by shipping copper to the US from London.

Bearish

• Industrial metals may fall on fears that Trump’s incoming tariffs will ignite a global trade war.² A 25% US tariff against Mexico and Canada, as well as a second 10% blanket tariff against China, will come into effect this week. A further 25% US tariff against all steel and aluminium imports will come into effect on the 12th of March.

Explore copper with WIRE.

Gold

Bullish

• Uncertainty around the effects of Trump’s new tariffs may drive safe haven gold purchasing.³ Slower economic growth in affected countries could also result in weaker local equity market performance, making gold more attractive as a means of wealth preservation.

Bearish

• Gold fell on a strengthened US dollar after Trump announced tariffs against Canada, Mexico and China would go ahead.⁴ Investors had speculated that the tariffs may be delayed again as Trump has historically used them as negotiation tactics, however with the deadline approaching, delays grow less likely. A stronger US dollar makes gold more expensive to buy for international investors, often weakening demand.

Explore physical gold with GOLD.

Crude Oil

Bullish

• Crude oil prices in the US are rallying as Trump’s returning tariffs threaten two key oil suppliers, Mexico and Canada.⁵ North America has a tightly integrated oil industry. US imports approximately four million barrels per day from Canada and 400 thousand barrels per day of crude from Mexico.

Bearish

• Russia is lobbying for the US to lift sanctions on its energy exports.⁶ According to Vladyslav Vlasiuk, Ukraine’s commissioner for sanctions, a recent US-Russia talk in Saudi Arabia saw Moscow highlight the sanctions as top priorities.

Explore crude oil with BCOM.

Forecasts are not guaranteed and undue reliance should not be placed on them. This information is based on views held by Global X as at 04/03/2025. Investing involves risk, including the possible loss of principal. Diversification does not ensure a profit nor guarantee against a loss.

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This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. This information is not intended to be individual or personalised investment or tax advice and should not be used for trading purposes. Please consult a financial advisor or tax professional for more information regarding your investment and/or tax situation.