Washington: Commodity markets displayed mixed trends last week, as the uncertainty surrounding US President Donald Trump's proposed tariffs began to take shape. Trump has directed his economic advisors to devise a plan targeting countries that impose tariffs on US imports. This plan, which includes the evaluation of value-added tax (VAT) as a tariff, aims to promote fair trade practices.
According to Anadolu Agency, Howard Lutnick, the nominee for Secretary of Commerce, emphasized that each country's trade policies would be scrutinized individually, with a comprehensive plan expected by April 1. Meanwhile, Federal Reserve Chairman Jerome Powell noted that while inflation is nearing the target, the bank has not yet achieved its goal.
In the precious metals arena, geopolitical uncertainties and the anticipation of Trump's tariffs pushed gold prices to a record $2,942.74 per ounce, marking a 0.9% increase. Toronto-based Barrick Gold announced its intent to continue operations in Mali, contingent on the government's decision to resume gold exports. Silver, palladium, and platinum also saw gains of 1%, 0.9%, and 0.1% per ounce, respectively.
Base metals experienced a decline, except for copper, which rose 1.1% due to tariff concerns despite reassurances from Beijing. The People's Bank of China plans to adapt its monetary policy to support the economy amidst these challenges, with a focus on maintaining liquidity and stabilizing the yuan exchange rate. Meanwhile, officials from several countries, including Australia and Japan, have sought exemptions from US tariffs on various goods.
In the energy sector, oil production in Russia remained below OPEC+ quotas, with a potential peace agreement between Russia and Ukraine hinting at the possibility of lifting sanctions on Moscow. This development limited Brent crude oil's rise to 3.7%. Additionally, natural gas prices surged 12.6% due to European storage shortfalls and damage to Ukrainian facilities amid ongoing conflict.
Agricultural commodities also witnessed varied movements. Wheat surged 5.5% following the US Department of Agriculture's report, which predicted a reduction in China's wheat imports. Corn prices climbed 4.4% due to adverse weather in Argentina and Brazil, while soybeans saw a modest 0.4% increase. In contrast, rice and sugar prices fell by 2.8% each, the former due to market adjustments and the latter following increased production in Thailand.
The coffee market saw a 1.6% rise as global supply tightened, while cotton and sugar experienced declines. Cocoa prices, on the other hand, rose by 2.1% per ton. Vietnam expressed readiness to increase imports of US agricultural products amid the retaliatory tariffs, following a significant trade surplus with the US last year.