Citi sees higher US copper, silver, gold prices after Trump tariffs
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The news: Citi analysts expect prices of copper, silver and gold in the US to spike after the Trump administration imposed tariffs on Canada and Mexico.
The numbers: The Trump administration announced a 25% import tariff on Canada and Mexico (10% on energy imports from Canada) and a 10% levy on China to take effect from 4 February.
The brokerage said the US has a significant import reliance on Canada and Mexico for copper, silver, and gold, with the two countries representing 3,300 tonnes of annual US unwrought silver imports, 147,000 tonnes for copper, and 54 tonnes for gold. The US is also a significant importer of semi-refined gold and silver concentrate from the two countries.
The context: The analysts said redirection of trade flows could soften the impact of recent tariffs somewhat but the effective cost of these US metal imports will still be higher net-net versus London pricing combined with a heightened risk of physical shortages to meet US exchange contract delivery.
They expect further expected tariff escalation will be bearish for global growth, industrial metals and oil, but bullish for gold.
What they said: “In addition, willingness to tariff Canada and Mexico (as US free trade agreement partners) reduces the likelihood of FTA country exemptions from potential broader US tariffs that could be implemented later. Combined, we think this will see US pricing versus non-US for metals widen further,” the analysts said in a note.
The source: Citi research
