Gold fell $100 (an ounce) from its high, after a widespread selloff in commodities and equities markets on Thursda
| Photo Credit:
Chris Ratcliffe
The commodities market has been rocked by US President Donald Trump’s reciprocal tariffs announcement, with all commodity sub-asset classes ending up in the red on Friday.
Bloomberg Commodity Index declined by nearly 3 per cent to 101.59. Energy products such as crude oil, natural gas, heating oil, gasoline, gas and naphtha were one of the asset classes worst hit. Gold, silver, copper, platinum, rubber, cotton, coffee, soyabean, wheat, aluminium and nickel were among other commodities that declined.
“As the risk of a US-led global recession has risen substantially, we expect investor sentiment to tilt towards expectations of a challenging demand outlook for commodities in the coming weeks,” said research agency BMI, a unit of Fitch Solutions.
$ to the rescue
However, a weakening dollars likely to prevent a total collapse in the prices of most commodities, barring crude oil, it said
“Gold fell $100 (an ounce) from its high, after a widespread selloff in commodities and equities markets on Thursday. Markets are suffering hits from all sides as US President Donald Trump imposed the worst tariffs,” said Prithiviraj Kothari, Managing Director of RiddhiSiddhi Bullions Ltd.
On Friday, gold zig-zagged before slipping below $3,100 in the evening. It was last quoted at $3,052.76 (1940 hours IST). On Thursday, it hit a record high of above $3,200. Silver was even badly hit, losing over five per cent at $30.273 per ounce.
Kothari said if gold prices rule below $3,070, it can drop to $3,000 levels.
Concerns over US-China tensions
BMI expects the negative sentiment to hurt industrial metals, oil and agricultural grains most, while natural gas and agricultural softs remain supported by supply-side factors “at the moment”.
ICICI Securities said copper prices are expected to trade with a negative bias on fears that US tariffs on its trading partners and potential retaliation will deepen the trade war and increase the risk of global recession, denting demand for industrial metal.
Jateen Trivedi, VP research analyst – commodity and currency at LKP Securities, said that with the tariff premium now largely discounted, further downside pressure may emerge as geopolitical tensions remain relatively subdued.
BMI said global energy consumption could be hit if the economy slips into recession due to the tariffs. Painting a bearish picture for industrial metals, it said escalating tensions between China and the US raised worries over muted demand for cotton and other agricultural commodities.
Published on April 4, 2025
