The upcoming U.S. presidential election on November 5, 2024, is expected to have a significant impact on commodity markets.
If Kamala Harris wins the election, her focus on infrastructure spending could lead to increased demand for industrial metals like steel, copper, and aluminum. This surge in demand would benefit major steel producers and drive prices higher, particularly for iron ore.
Additionally, changes in trade policies under a Harris administration could reshape global commodity prices, particularly for agricultural commodities like corn, wheat, and soybeans.
On the other hand, if Donald Trump is re-elected, his administration's policies favoring deregulation and support for domestic fossil fuel production could lead to an increase in energy supply, potentially lowering prices for oil, natural gas, and coal.
The upcoming election also has implications for precious metals like gold and silver, which are often seen as safe-haven assets during times of geopolitical uncertainty. If there is an increase in perceived geopolitical risk following the election results, there could be a rush to buy these metals, pushing their prices higher.
The fiscal and monetary policies of either candidate will also play a crucial role in shaping the strength of the U.S. dollar, which directly impacts commodity prices. A stronger dollar makes raw materials more expensive for buyers using other currencies, potentially reducing demand. Conversely, a weaker dollar could enhance demand for U.S. commodities. Both election scenarios could initially push the dollar lower, but the ultimate direction will depend on monetary policy in relation to growth and inflation prospects.
Under a Harris administration, the focus on infrastructure spending is expected to create a robust demand for industrial metals, while Trump's policies may favor traditional energy sources and deregulation, potentially impacting the overall energy market. The agricultural sector is also likely to experience significant shifts depending on the election outcome, with Harris's potential changes to trade policies and tighter environmental regulations potentially impacting agricultural exports and prices.
As the election date approaches, market participants will closely monitor the evolving political landscape and its potential ramifications for commodity markets. The interplay between fiscal policies, trade relations, and geopolitical factors will shape the future of commodities, making the upcoming election a pivotal moment for investors and stakeholders in the financial landscape.