Metals markets had a manic start to the week as investors reacted to global trade turmoil, with copper first plunging to its lowest since 2023 in London before swinging to a gain. Gold extended its drop from a record high.
Commodities have been caught up in the jitters sweeping world markets in the aftermath of U.S. President Donald Trump’s tariffs jolt, and China’s tougher-than-expected retaliation. Base metals collapsed initially on Monday, after racking up big losses on Friday, while gold fell more than 2%.
The immediate losses were tempered as the trade panic showed signs of easing, at least for now. Copper — which at one point was heading for its worst three-day rout since the great financial crisis — converted a loss of more than 7% to a gain of more than 3%. Aluminum is now poised for its first advance in 13 days.
Some analysts said the price slump was triggered by a wave of investors cutting outstanding positions to minimize risks, a dynamic that has now partially played out. There’s also speculation about China taking steps to counter economic headwinds. Chinese policymakers discussed ways to stabilize the economy, including by accelerating stimulus, according to people familiar with the matter.
Still, the uncertainty is unlikely to fade soon as Trump’s bid to reshape international trade rolls on.
Under Pressure
Metals are “under significant pressure from dampened sentiment as the world braces for a possible recession and heightened geopolitical tensions that would threaten demand,” said Sabrin Chowdhury, head of commodities at BMI, a Fitch Solutions unit. “The strong likelihood of a severe downturn in metals demand in a full blown trade war will keep metal prices under pressure for the coming weeks.”
By 2:33 p.m. Shanghai time, copper on the London Metal Exchange was up 0.7% at $8,843.50 a ton. Aluminum and zinc rose, while spot gold was down 0.5% at $3,022.99 an ounce.
Gold’s retreat comes just days after the metal hit a record high on demand as a haven amid growing geopolitical risks. Although gold typically benefits from periods of upheaval — and remains 15% higher this year — it can be sold during extreme market dislocation as investors seek to cover losses elsewhere.
“We are seeing profit taking to cover significant losses in equity markets and probably due to margin calls,” Vasu Menon, managing director of investment strategy at Oversea-Chinese Banking Corp., said by text message.
Demand Worries
Copper prices had been surging until late March as threatened US tariffs on the metal fueled a scramble to send supplies to America. But that trade unraveled with those tariffs likely to come sooner than expected, and Trump’s punitive “reciprocal” duties prompted much larger fears around global demand.
Monday’s swing higher also suggests some investors expect tight global mine supply would continue to lend some support to copper. The balance between formidable short-term risks and copper’s long-term prospects will be a key point for discussion at a major conference in Chile this week.
The market has returned to pricing logic based on fundamentals for now, Ruan Yinan, a senior trader at Jin Li Industrial International Pte in Singapore, said after Monday’s price reversal.
Silver joined the big swings, gaining as much as 4.2% after an earlier decline of 4.2%, before trading 1% higher. Iron ore futures in Singapore were down 2.9% at $97.65 a ton.
--With assistance from Winnie Zhu, Alfred Cang and Yihui Xie.
©2025 Bloomberg L.P.
