Trade tensions trouble commodity prices

by: Georgette Boele , Hans van Cleef , Casper Burgering

On 10 April the CRB set a top and the index started a modest decline. Since 22 April the decline has accelerated and the index has lost around 5%.

The decline of oil prices since 25 April has driven the CRB lower. Subsequently, cry renewed trade tensions between the US and China have sent global stock markets and commodity prices lower.

Gold prices did relatively well because the USD failed to profit from the risk-off sentiment. This is probably because the US is seen as partly responsible for the rise in trade tensions.

If US-China trade tensions intensify further commodity prices will suffer. Renewed safe-haven demand for the US dollar will probably also weigh on gold prices.

The downside in the CRB index could be limited if higher tensions between the US – Iran and Saudi Arabia – Iran result in oil supply fears.

Also in this publication:

  • Energy – Oil rangebound – US Iran policy and OPEC meeting in focus
  • Precious Metals – Gold prices unlikely to rally in case of more trade tensions
  • Base Metals – US/China trade talk progress is cliff-hanger for prices
  • Ferrous Metals – Strong steel output growth in China and US
  • Agriculturals – Concerns about high availability is weighing on agricultural prices

Monthly-Commodity-Insights-05-2019.pdf (855 KB)