Trump election to have implications for Commodities

UNITED STATES November 14 2016 7:09 PM
NEW YORK (Scrap Register): President-elect Donald Trump’s policies will eventually have important implications for commodity markets, said Barclays in a research note.

“On the environment, he is a known climate-change denier and promises the country’s environmental agenda will be guided by ‘true specialists in conservation, not those with radical political agendas,’” the bank added. 

“The U.S. energy sector is very likely to see a rolling back of environmental legislation affecting producers and consumers, but exactly how this plays out in markets and pricing, it is far too early to say. Likewise in metals, while an infrastructure surge could boost domestic metals demand, his plans to introduce import tariffs on many countries and the tit-for-tat that will go with it could lead to slower world GDP (gross-domestic-product) growth such that the net metals demand change from a global perspective is negative,” said analysts at Barclays.

Barclays later added, “Although we caution against reading too much into early commodity price moves following Trump’s election, there is perhaps one indicator that is meaningful: the fact that gold prices, although spiking higher initially, have now returned to their pre-election levels suggests that as with the Brexit vote, his victory seems unlikely to be the risk-off event that many had feared, at least in the short term.”