Trump tariffs, copper chaos, and the metals that also matter – Saxo Financial institution

President Trump continues to wield appreciable affect over world markets, together with commodities. In July, consideration centered on intense commerce negotiations forward of the self-imposed August 1 deadline. Whereas a framework deal was reached between the U.S. and EU, and talks with China continued forward of the mid-August expiry of a 90-day tariff truce, different U.S. buying and selling companions struggled to safe agreements.

Regardless of these negotiations, markets skilled an eerie calm, permitting U.S. equities to increase their rally. The S&P 500 and Nasdaq each hit document highs, supported by surprisingly sturdy U.S. financial information. That power delayed fee reduce expectations, lifted Treasury yields, and gave the greenback a modest increase after months of weak spot.

Treasured metals spent July consolidating their first-half positive factors. Silver and platinum prolonged their rallies, regaining some floor versus gold, which continues to commerce in a slender vary after hitting a document excessive of $3,500 in April. Platinum briefly reached a year-to-date acquire of 61%, whereas silver got here near $40—its highest since 2011, although nonetheless beneath the all-time peak of $50.

Additionally supporting silver and platinum early within the month was a surge in Excessive-Grade copper costs in New York, which hit a document $5.8955/lb on July 8. This adopted President Trump’s shock suggestion of a 50% tariff on copper imports—double what markets had priced in. The comment drove the premium over LME copper in London to a document 34%, sparking a rush to ship copper into the U.S. forward of the deadline.

That commerce unraveled final week when Trump, in a sudden reversal, introduced that refined copper—traded on futures exchanges—could be excluded from the tariff till not less than January 2027. The New York premium collapsed inside minutes, leaving merchants nursing losses and U.S. warehouses with copper inventories at a 21-year excessive. With imports set to dry up, U.S. costs could now fall beneath world benchmarks to clear the surplus.

Whereas New York copper grabbed headlines, LME copper remained comparatively secure, buying and selling round $9,550 per ton ($4.33/lb). Our medium- to long-term bullish view stays unchanged. The tariff reversal solely underscores copper’s strategic function within the world vitality and digital transition. Demand is predicted to rise sharply because of the electrification of transport, industrial reshoring, and speedy growth of AI-driven information facilities.

Provide, in the meantime, stays constrained by underinvestment and up to date disruptions—together with a mining accident in Chile. Consequently, copper costs are prone to stay risky however biased greater, supported by each near-term momentum and long-term structural tailwinds. It’s more and more changing into the defining commodity of the vitality and digital age.

Treasured Metals: Focus Shifts to Tariffs and Fed Coverage

After a stellar first half, funding metals entered a consolidation section in July, with some volatility triggered by copper’s sharp strikes. Gold has traded sideways for 4 months, permitting silver and platinum to catch up. With year-to-date positive factors close to 27% for gold and silver and practically 50% for platinum, buyers are naturally asking: is the rally over?

We don’t imagine so. Latest information weak spot within the U.S. has reopened the door for Fed fee cuts. Friday’s dismal jobs report, together with sharp downward revisions to prior months, has led markets to virtually absolutely value in a reduce on the subsequent FOMC assembly on 17 September, with extra anticipated into 2026. The efficient Fed funds fee is now seen 125 foundation factors decrease by subsequent September.

The important thing drivers which have propelled metals greater in recent times stay intact, and extra tailwinds may emerge within the second half. Most notably, the talked about prospect of decrease U.S. rates of interest may reignite demand, particularly for metal-backed ETFs by lowering the chance price of holding non-yielding belongings like treasured metals, in comparison with short-dated authorities bonds.

To grasp gold’s enduring attraction—and by extension, that of silver and platinum—it’s essential to recognise what units these metals aside. Treasured metals are politically impartial, in contrast to sovereign bonds or fiat currencies. They’re universally recognised as a retailer of worth, not tied to the creditworthiness of any nation, which is why central banks are more and more allocating to gold as a core reserve asset.