Via Bloomberg
The Fed's hawkish cut and Trump's return to tariff tactics bodes poorly for commodities. On Thursday last week the Bloomberg Commodity Index fell by the most in a year and is looking to test this year's lows.
Gold was always looking for a dovish Fed to extend it's next leg. I remember that the last move from gold breaking above 1360 was a dovish turn from the Fed. So, Powell's more neutral stance, which I took to be more hawkish overall, is not going to give Gold that immediate boost. However, as a longer term safe haven in a low yielding world gold still remains attractive adn should be bid on dips.
Copper is falling on Trump's latest tariff's once again prompting concerns over global growth. Less global GDP, less growth, less demand for Copper. Also, China's leadership are reported to say that they won't use the property sector as short term stimulus. That's a knock to the raw material used in construction which should also weigh on the remaining industrial metals complex
Iron Ore is now under $100 a ton having fallen from $120 a ton. A further fall into $80 a ton is on the cards in the current risk off environment.
Oil may hold up with OPEC+ cuts and geopolitical risks always threatening supply, but the paper thin risk sentiment, ready to break on a Trump Tweet, will keep dragging oil down on concerns about global consumption in a tariff hindered world.
