(Reuters) – Goldman Sachs said on Monday the copper market is pricing in a around 50% chance that the United States will impose a 10% tariff on the metal by the end of the first quarter of this year.
Analysts at the US investment bank said in a client note that the estimate is similar to their own subjective 50% probability of an effective 10% tariff on copper by the end of the year.
Three-month copper on the London Metal Exchange fell 0.3% to $9,167 a metric ton by 0706 GMT after hitting a one-month high last week. [MET/L]
President-elect Donald Trump returns to the White House later in the day with an inaugural address that traders will analyze to determine what policies will be implemented on the first day. Trump has talked about tariffs of up to 10% on global imports, as well as 60% on Chinese goods and a 25% import surcharge on Canadian and Mexican goods.
Goldman also noted that the oil market is pricing in a nearly 40% probability of a 25% U.S. tariff on Canadian products, including oil, versus the bank’s subjective 15% probability of a 25% effective tariff for end of the year.
Brent crude futures were trading around $80.69 a barrel, while the most active US April West Texas Intermediate crude contract was steady at $77.36. [O/R]
The investment bank assigned a 10% chance that an effective 10% tariff on gold will be introduced in the next 12 months. He said bullion’s status as a financial asset makes it likely it will be exempt from broad tariffs.
Spot gold prices rose 0.3% to $2,708.77 an ounce, while U.S. gold futures were little changed at $2,749.70. [GOL/]
The amount of gold stocks in COMEX-approved warehouses has risen by a third in the past six weeks as market players sought deliveries to hedge against the possibility of tariffs.
(Reporting by Ashitha Shivaprasad and Ishaan Arora in Bengaluru; Editing by Christopher Cushing)