Copper, Oil Market Price in Tariffs Post-Trump Inauguration
Goldman Sachs anticipates a 50% probability of a 10% U.S. tariff on copper by Q1 end, aligning with their own subjective estimate.
Three-month copper on the LME experienced a slight dip of 0.3%, influenced by President-elect Trump's upcoming inauguration speech, which may reveal his initial policy intentions. Trump has proposed tariffs ranging from 10% to 60% on global imports.
Goldman also estimates a 40% likelihood of a 25% U.S. tariff on Canadian goods, including oil, while Brent crude and WTI crude remain relatively stable.
Despite concerns over tariffs, Goldman assigns a low 10% probability to a 10% effective tariff on gold within the next year, given its status as a financial asset. Gold prices have increased slightly, with spot prices rising by 0.3% and U.S. gold futures showing minimal change.
COMEX-approved warehouses have seen a surge in gold stockpiles over the past six weeks as investors seek to hedge against potential tariffs.