Citi Cites US Election as Key Factor in Stalling Metals Market Gains
Uncertainty surrounding the US election and global economic risks hold back metals prices, with a potential recovery expected in late 2024.
Editorial Team (ET)March 30, 2026
The upcoming US presidential election is casting a long shadow over the global metals market, with Citigroup Inc. warning that uncertainty around the political landscape will likely keep metals prices subdued in the short term. According to a note released by Citigroup analysts, including Tom Mulqueen, the November election will hinder meaningful price gains by curbing global risk appetite and possibly delaying government stimulus in China.
Election Uncertainty Dampens Market Sentiment
The race between Republican nominee Donald Trump and Vice President Kamala Harris is expected to be tight, with both candidates representing vastly different policy paths. This uncertainty is making investors wary of taking big bets, particularly in the commodities sector, where metals are highly sensitive to political shifts. Citigroup’s analysts believe this hesitation will persist until the election is over and policy direction becomes clearer.
“We think Fed rate cuts, further China policy easing, and an upturn in global manufacturing sentiment will be more constructive for metals pricing in late fourth quarter or early 2025, once the US election is behind us,” the analysts noted.
Metals Struggle Amid Broader Economic Concerns
Metals markets, from copper to aluminum, have faced significant pressure in recent months. Concerns about slowing demand in China, compounded by global economic jitters, have driven prices down. Copper, a key industrial metal and economic barometer, has seen a second straight weekly decline on the London Metal Exchange. Meanwhile, aluminum is on track for its eighth consecutive daily loss, and zinc has also slumped as China’s steel market continues to face challenges.
The broader commodities market was further shaken earlier this week when Goldman Sachs revised its 2025 copper forecast, slashing $5,000 from its original projection. This move underscores growing caution within the market, with metals becoming collateral damage in the face of global economic uncertainty and political tensions.
Delayed Chinese Stimulus and the Role of the Federal Reserve
Another factor contributing to metals' muted performance is the lack of immediate stimulus from China, the world’s largest consumer of metals. Citigroup noted that Beijing is likely holding back on major economic initiatives until the US election is settled, a tactic that could delay a broader market recovery. Chinese policymakers may be cautious about making significant moves that could be upended by potential shifts in US trade policy.
Meanwhile, in the US, the Federal Reserve is grappling with its own set of challenges. With a slowing job market—evident in August’s disappointing employment report—the debate over how aggressively the Fed should cut interest rates is intensifying. The report revealed that hiring fell short of expectations, and downward revisions to the previous two months have added to concerns about the strength of the economic recovery. While rate cuts could provide some relief for the metals market, Citigroup predicts that their impact will be more pronounced after the election, when global risk sentiment has improved.
Potential Trade Tariffs Looming on the Horizon
The prospect of new or higher tariffs should Trump return to the White House is another major risk factor that could weigh on metals prices, according to Citigroup. During his previous administration, Trump’s aggressive stance on trade and tariffs disrupted global supply chains, particularly in industrial metals. A similar approach in a second term could add to the headwinds already facing the market.
On the other hand, a Harris administration may offer more stable trade policies. Vice President Harris has voiced support for multilateral trade agreements and has advocated for policies that would foster smoother global trade relations, potentially creating a more favorable environment for commodities like metals.
Short-Term Projections for Metals Prices
Citigroup held its three-month forecasts for key metals, with copper projected at $9,500 per ton and aluminum at $2,500 per ton. While the bank remains cautious about short-term price movements, it suggests that an eventual recovery in global growth, coupled with more aggressive policy easing from China, could help lift metals prices toward the end of 2024 or early 2025.
Nevertheless, metals prices remain highly sensitive to political developments. As the election draws closer, both the risk of tariffs and the uncertainty around US-China trade relations will continue to cast a long shadow over the market.
Conclusion: A Fragile Recovery for Metals Post-Election
In the near term, the metals market is likely to remain in a holding pattern, with investors keeping a close eye on the political landscape in the US and the broader global economy. Citigroup’s forecast points to a more constructive environment for metals once the election uncertainty fades, with Fed rate cuts and Chinese stimulus expected to play crucial roles in driving a recovery.
However, the outcome of the US presidential election remains a significant wildcard. Whether the next administration takes a protectionist stance or leans toward more open trade policies will have long-lasting effects on global markets, particularly for metals. Investors, for now, seem content to wait for the dust to settle before making any significant moves.
