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How Trump’s victory could affect US economy?

Experts at Citibank are pondering the consequences for the markets if Donald Trump wins the election. This is a very important question that cannot be ignored. Currency strategists at Citi predict that if the Republican becomes president again, it will seriously impact commodity markets.

Experts believe that the dominance of the Republican Party could also affect the election outcome in the US. Investment bank analysts are sure that the most significant change for commodity markets under Trump will be his plan to impose huge taxes on goods the US buys from other countries. However, these taxes will not be implemented next year since they must go through mandatory review by the US Trade Representative and receive approval from higher authorities. This waiting period will allow the Federal Reserve and the ECB to lower interest rates, according to Citi.

The bank predicts positive changes in precious metal prices over the next 6–12 months. Citi analysts estimate that gold could rise to $2,700–$3,000 per ounce and silver to $38 per ounce within a year. Experts believe that the anticipation of more intense trade disputes between Washington and Beijing could drive investors to buy precious metals as a safe-haven asset, boosting their prices.

However, the further appreciation of precious metals might be hindered by the rising value of the dollar, causing gold to perform better than other commodities and financial assets. Citi analysts are less optimistic about oil. They predict that in the second half of 2025, the global market will see a decrease in the oil volume. Moreover, Trump's possible re-imposition of sanctions against Iran will not have the same effect as before, and other political measures will lead to a drop in oil prices.

The bank also considers the possibility of resolving the Russia-Ukraine conflict and strengthening relations between the US and Saudi Arabia. In this scenario, the amount of available raw materials will increase, putting additional downward pressure on oil prices. Regarding China, Citi experts believe that the Chinese authorities will respond to potential new taxes with a softer economic policy and will start gradually changing their energy system. This will positively affect metals like copper and aluminum. In this scenario, a ton of copper could cost $12,000, and aluminum could be priced at $2,800-$3,000 per ton. Such changes will begin no earlier than the second half of 2025.

Analysts expect that China will offset the negative impact of the taxes through large-scale economic support measures in the renewable energy and electric vehicle sectors. The bank’s forecast does not suggest a significant impact of Trump’s presidency on the development of the electric vehicle sector in the US. Even with less stringent requirements for electric vehicles and the ongoing introduction of hybrid cars, the steady growth of this industry is guaranteed by subsidies, analysts conclude.

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