Goldman Sachs Warns Tariffs Will Trigger Critical Metal Volatility

Goldman Sachs warns that trade war uncertainty and the implementation of tariffs will trigger renewed volatility in critical metal markets, specifically affecting silver, copper, platinum, and palladium. Daan Struyven, the bank's co-head of global commodities research, explains that tariffs pull metal inventories into the United States to meet national security objectives, which tightens liquidity and inventories in markets outside the U.S.

This imbalance creates a risk of extreme price swings if investor demand recovers or if countries begin hoarding supplies. Copper is identified as particularly vulnerable because of its essential role in AI infrastructure buildouts and a projected decade-long supply deficit. While these market conditions may attract investors, Struyven warned that rising prices could increase costs for manufacturing companies.

Struyven noted that implementing tariffs is unlikely to create new critical mineral supply because mines and smelters take far longer to build than tariffs take to change. However, he suggested that the risk of tariffs achieves a national-security objective by pulling metal inventories into the U.S. without requiring large-scale government purchases.