Trump Victory to Have Long-Lasting Impact on Commodity Prices – by Georgi Kantchev (Wall Street Journal – November 9, 2016)

Commodity markets were feeling the effects Wednesday of Donald Trump’s surprise victory in the U.S. election. Analysts say some of the impact could be long-lasting.

In early trade Wednesday, Brent, the global oil benchmark, was down 1% at $45.55 a barrel. J.P. Morgan analysts predict Brent could trade at $43 a barrel within a week of a Trump win. The bank forecasts copper falling to $4,760 a ton, down from $5,359 a ton early Wednesday.

From oil to copper and gold, analysts expect the risk-off sentiment in financial markets to continue to rattle commodities in coming days. Mr. Trump’s opposition to international trade deals and what analysts say is a lack of clarity in his policies could slow global economic growth and pull down commodities prices in its wake, they say. Gold, on the other hand, is expected to benefit as investors take flight to safe havens.

“Uncertainty about who is going to be president has now been replaced with risk and that will hit every asset class including commodities,” said Neil Williams, chief economist at Hermès Investment Management.

Still, it isn’t necessarily straightforward. Some elements of Mr. Trump’s election promises could be positive for oil. A falling dollar, meanwhile, might provide some respite for commodities. The Wall Street Journal Dollar Index, which tracks the greenback against a basket of other currencies, fell 0.1% on Tuesday.

For the rest of this article, click here: