Fresh threats of trade tariffs from the US, causing losses across the market may extend commodities market desertion, contract for difference trading (CFD) firm, markets.com, has said in a market analysis on Monday.
The commodities market fell to its lowest level since the beginning of April, and agriculture was the worst hit of all the sectors.
Many commodities have hit multi-year highs this year, with the market as a whole enjoying its best year since 2002 on hopes of co-ordinated global growth.
Fears over trade have prompted many investors to close winning positions to lock in profit, a trend which could continue next week.
Gold has been driven down to a six-month low, with it increasingly looking like markets are favouring the US dollar in times of uncertainty.
“It could be another fraught week, as trade tariffs are likely to remain high on the agenda. They will certainly be one of the main topics of discussion at this week’s European summit, and of course we have to wait to see whether the additional tariffs on $200 billion worth of Chinese imports threatened by Donald Trump last week actually materialize,” markets.com said.
World leaders are still trying to decide how to react to US protectionism and could take some time to deduce solid direction on whether the markets can relax or panic.