Trump dropped a tariff bomb on commodity markets this week, and copper traders felt every bit of the blast.
What started as panic selling over potential Chinese tariffs quickly turned into a buying opportunity once the dust settled and traders realised refined copper had dodged the bullet.
The week served up a reminder that short-term volatility often creates the best entry points for long-term themes that haven’t changed.
Here’s what we’re breaking down this week:
- Copper plunged after Trump’s surprise tariff threat torched bullish bets.
- Gold ticked back up as weak US data set a floor in the gold price.
- Iron ore holds steady, but Rio’s earnings miss shows the cracks starting to form.
- Lithium prices bounced, as analysts suggest the lithium bottom may finally be in.
- Diggers & Dealers here we come next week.
Trump’s Tariff Threat Triggers Copper Sell-Off, Then Rebound
Copper was smashed this week, with prices diving more than 23% as traders reacted to a wave of tariff headlines coming out of the US.
Early reports pointed to sweeping new tariffs on Chinese electric vehicles, batteries and critical minerals. It was enough to spook the market into a full-blown sell-off.
But by mid-week, the smoke cleared and traders realised refined copper had actually dodged the worst of Trump’s proposed tariff package.
Refined copper refers to the high-purity metal produced from smelters, used in everything from power grids to EV wiring.
The distinction mattered. Once it became clear that the actual copper flowing into infrastructure and manufacturing wasn’t getting hit, selling pressure eased.
The long-term copper story remains rock solid. Years of underinvestment, declining grades, and surging demand from AI infrastructure and electrification haven’t gone anywhere.
If anything, this kind of headline-driven sell-off gives patient investors a better entry into one of the most important metals of the next decade.
Gold Price Rises as Weak US Jobs Data Cools Rate Fears
Gold clawed back nearly 2% this week after soft US payroll data took the heat off interest rate expectations and gave the metal some breathing room.
Traders had braced for a strong US jobs number that might reignite talk of another hike, but instead, the data missed and the US dollar cooled off. That opened the door for a bid in gold, which had been grinding lower for two weeks straight.
The bounce wasn’t dramatic, but it helped steady the ship and gave some life to a market that’s been under quiet pressure since early July.
The underlying demand story hasn’t changed. Central banks, funds, and investors are still looking for protection against sticky inflation and geopolitical tension.
That steady accumulation continues to build a floor beneath the market, even if the headlines aren’t shouting about it. This week’s move might be the start of something more meaningful.
Rio Tinto Cuts Dividend as Iron Ore Profit Falls to 4-Year Low
Iron ore was flat this week as weak Chinese demand and bloated port inventories continued to weigh on prices.
But the real shift came from Rio Tinto’s half-year result, which told the story investors have been feeling for months – profits are sliding and the easy iron ore money is drying up.
The company posted its smallest first-half underlying profit since 2020 and trimmed its interim dividend to the lowest level in seven years. Rising Australian costs and softer iron ore prices did most of the damage.
Australia’s iron ore windfall, once a cash cow for federal budgets and mining majors, is starting to run dry. Prices are still holding above crisis levels, but the boom days of $200 a tonne are fading into memory.
Many are now predicting iron ore to fall in the coming years to US$74/t, a huge hit to Australia’s federal budget.
It lays bare the reality that even the big miners aren’t immune to a slowdown. And with a new CEO stepping in, it’s a tough time to be taking the reins.
Lithium Prices Bounce, But Analysts Say Oversupply Still Rules
Lithium’s found a bit of breathing room lately, with spot prices inching higher and sentiment finally turning less toxic.
After a year-long capitulation that smashed valuations and sent juniors scrambling for cash, even a modest bounce feels like progress. But most analysts reckon it’s just that – a bounce – not the start of a proper recovery. No victory lap just yet, lithium bulls.
The view from S&P Global this week was pretty clear: the rebound could be short-lived, with oversupply still the dominant force.
New tonnes are hitting the market from Australia, China and South America, while EV demand, though still growing, isn’t picking up fast enough to soak it all up.
Battery makers are also sitting on inventory, and they’ve been in no rush to restock at scale.
The weaker players are being flushed out, exploration budgets are being cut, and developers are tightening up. That’s what a bottoming process usually looks like.
The long-term story around electrification and battery demand hasn’t changed, but the market got way ahead of itself, and now it’s working through the excess.
Diggers & Dealers Kicks Off in Kalgoorlie Next Week
We’re heading to Kalgoorlie next week for Diggers & Dealers, where the mining world descends on the Goldfields for three days of deals, drinks, and plenty of networking.
It’s where the industry loosens up a little, and where the stories behind the announcements usually start.
Expect the full rundown in next week’s wrap – who’s making moves, what’s getting the most buzz, and which stories are worth following.
ASX Small-Cap Action Says Watch Closely
Predicting where commodity prices go next is always a mug’s game, but what we can track is market participation. And right now, small-cap volumes on the ASX are telling us interest is back.
Yes, copper fell sharply this week, Rio disappointed, and lithium is still crawling out of its hole. But for investors looking longer term, weakness like this often sets the stage for the next run.
When the tide turns (and it always does) the companies already in motion, drilling, building, raising, are going to be the first ones re-rated.
The question is who’s positioned when it does.
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