Investing.com -- BCA Research analysts weighed in on the impact of Donald Trump's return to the White House on the commodities market, offering a mixed outlook across different sectors.
The analysts noted that Trump's pro-oil "drill, baby, drill" policies are unlikely to immediately impact U.S. crude production.
"For now, crude prices will drive US producers' output decisions," they said, adding that significant growth in U.S. crude oil production would likely require a longer-term, multi-year horizon.
However, Trump's foreign policy could bring heightened risks to global oil markets. His "Maximum Pressure" campaign on Iran is expected to raise concerns about the country's crude exports, particularly during Joe Biden's lame-duck period.
Despite this, "plentiful OPEC spare capacity will limit the magnitude and duration of any supply-shock-induced price spike," according to BCA Research.
The analysts see Trump's victory as bullish for gold, citing the metal's traditional role as a safe haven amid elevated global policy uncertainty.
"The yellow metal will benefit from increased safe-haven demand," they explained.
On the other hand, the firm believes industrial metals like copper could face downward pressure. Substantial U.S. import tariffs and escalating global trade tensions under a Trump administration would likely weaken global manufacturing activity, creating headwinds for copper prices.
BCA Research concluded with a strategic recommendation: "Over a cyclical timeframe, we recommend a maximum overweight to gold and an underweight to oil and copper within a commodity portfolio."
They forecast elevated oil volatility in the near term but see downside risks for both oil and copper over the next six to nine months.
Gold stands out as the commodity best positioned to benefit from Trump's policies, with the analysts urging investors to "stay long COMEX gold."