Copper prices rebounded on Thursday, but silver prices did not, one day after the announcement that Donald Trump will become the 47th President of the United States.
Silver traded at $31.20 an ounce, up about half of a percent on the day but down about 10% over a 10-day trading period. Copper prices, however, rebounded off its Wednesday low of $4.26 an ounce to $4.38, a 2.8% rise that has almost wiped out nearly all election-related losses.
Many in the investment world attributed the drop in industrial metals to investor fears that Trump will begin a tariff war with China and hurt its economy further, which would likely reduce infrastructure-related spending on metals.
Ole Hansen, head of commodity strategy at Saxo Bank, said, “This scenario is expected to bring about the promised tariffs on imported goods, particularly targeting China, potentially triggering a new way of trade tensions and economic disruptions.”
Terry Duffy, chairman and CEO of CME Group, told Fox Business on Wednesday that trading volumes across the board had increased after Trump’s win was secured.
“We are seeing multiple volume explosions in all of our asset classes,” he said. “In the gold market, the volume has basically tripled on a daily basis and it is down 3%.”
Gold prices tumbled about $80 an ounce in response Wednesday. On Thursday, prices remained flat around $2,660 an ounce.
Duffy noted a rise in 10-year treasury yields, marking a notable bear-territory shift on long-term treasuries.
“Traditionally (with gold) that can correlate with rates, but it has taken a bit of a divergence (from rates),” he said.
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