Commodity markets were whipsawed in 2025 as U.S. President Donald Trump’s tariffs, trade threats and geopolitical manoeuvring drove prices more by headlines than fundamentals. Volatility surged across energy, metals and precious assets, producing sharp winners and losers. While 2026 could bring relative calm if trade tensions ease, the aftershocks of Trump-era policy shifts are likely to linger, reshaping commodity dynamics well beyond the coming year.
Much depends on which version of Trump dominates in 2026: the deal-maker seeking stability, or the disruptor ready to reopen trade wars.
Gold: Stellar Gains Meet Political Risk
Gold was the standout performer of 2025, surging around 60% as investors sought protection from geopolitical risk, fiscal excess and waning confidence in traditional safe havens such as U.S. Treasuries. A more predictable U.S. policy environment in 2026 could see gold enter a consolidation phase, though central bank buying and diversification flows should keep prices well supported.
Fresh upside would likely require a new crisis. Risks include potential damage to Federal Reserve credibility if monetary policy is seen as politically driven, or market backlash against persistently high public debt and deficits in developed economies.
Oil and Gas: Supply Overhang Threatens Prices
Crude oil faces mounting downside risks in 2026. Rising global supply, combined with the potential return of Russian exports if a Ukraine peace deal is reached, could weigh heavily on prices. Liquefied natural gas may also struggle as new U.S. export capacity comes online, forcing prices lower to clear excess supply.
Trump’s energy-focused trade deals add further uncertainty. Commitments by trading partners to buy vastly increased volumes of U.S. energy such as the EU’s pledge of $250 billion annually appear unrealistic. Europe’s actual 2025 imports fall far short of that level, raising the risk of renewed trade retaliation if Washington decides to enforce these promises.
Metals: Copper’s Boom May Unwind
Copper rode a Trump-driven rally in late 2025 as buyers rushed shipments into the U.S. ahead of possible tariffs. This stockpiling has drained inventories elsewhere, pushing prices to record highs. If tariffs on refined copper materialise in 2026, U.S. imports are likely to fall as inventories are run down, easing pressure on global supply and allowing buyers like China to step back in.
In contrast, rare earths and critical minerals could emerge as winners. U.S. efforts to build non-China supply chains for lithium, cobalt and rare earth elements are likely to accelerate, supporting prices and investment in these strategically vital materials.
China-Centric Commodities: Iron Ore and Coal
Some commodities remain more exposed to China than the United States. Iron ore, with roughly three-quarters of global seaborne demand headed to China, was stable in 2025. But prices may come under pressure in 2026 as new supply from Guinea’s Simandou mine heavily backed by Chinese interests ramps up.
Coal markets are also increasingly driven by China and India. Seaborne thermal coal prices could weaken if both countries continue to expand renewable energy capacity and reduce reliance on imports, even as domestic production rises.
Outlook: Supply Is the Bigger Threat Than Tariffs
While tariffs and trade disputes will continue to jolt markets, the dominant theme for 2026 may be softer demand colliding with rising supply. New oil barrels, LNG plants and mining projects are coming online just as global growth faces downside risks.
Personal Analysis
The Trump effect has transformed commodities into a policy-driven asset class, where political signals often outweigh supply-demand fundamentals. In 2026, the greatest risk may not be another tariff shock, but a delayed reckoning with excess supply built during years of geopolitical disruption. Gold remains the most resilient hedge against policy error, while energy and industrial metals look increasingly exposed if global growth falters. For investors and policymakers alike, the challenge is no longer reacting to Trump’s next move but managing the physical glut his policies have helped create.
With information from Reuters.
