As the Lunar New Year festivities approached, the international investment landscape experienced significant fluctuations influenced by two major factors: the ongoing tariffs imposed by the American government and the broader trends in global asset allocation strategiesInvestors turned their gazes toward safe-haven assets, with gold making headlines by soaring to historic highsConcurrently, the U.S. dollar and government bonds exhibited strength, while most commodities faced declining prices, reflecting a complicated interplay between risk appetite and geopolitical tensions.

The January meeting of the Federal Open Market Committee (FOMC) leaned towards a dovish stance, signaling potential shifts in monetary policy, particularly in light of the disheartening fourth-quarter GDP data for the U.SThis combination painted a picture of uncertainty in the economic environment, which only intensified with the administration's sweeping tariff measuresSuch developments have proved advantageous for gold's appeal, encouraging speculation regarding its price trajectory as it inches toward new milestonesMeanwhile, with ample liquidity in the markets, consumer demand within the context of constrained supply for several base metals also suggests investment opportunities.

To better understand the dynamics at play, let’s examine the data surrounding industrial metals, particularly copper and aluminumLeading up to the Lunar New Year, fluctuations on the London Metal Exchange (LME) reflected a mixed yet telling narrativeFor instance, in the week before the holiday, LME prices for copper rose by 1.0%, whereas aluminum and lead prices fell by 1.8% and 1.5% respectivelyAs the festivities unfolded from January 27 to February 3, copper prices dipped by 1.7%, aluminum by 0.4%, indicating a minor pullback in demand amidst ongoing uncertainties.

The resilience in copper and aluminum prices despite the looming tariff threats underscores an intriguing development in the commodities market

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The backdrop is marked not only by financial influences but also by underlying commodity fundamentals that hint at a recovering world economyChina's improved manufacturing data, coupled with a surge in sectors such as electric vehicles and AI that heavily utilize copper, bodes well for future demand.

Moreover, the broader implications of the tariff policies initiated by the U.S. government cannot be overlookedThe new trade conflict bears the hallmark of a larger narrative regarding U.S.-China relations, akin to a geopolitical chess game fraught with economic calculationsWith the imposition of 10% tariffs on Chinese goods and 25% on imports from Mexico and Canada, the markets responded with jittersAlthough the tariffs on the latter were momentarily delayed, the uncertainty unleashed major volatility across global financial markets, thereby enhancing the role of gold as a safe havenInvestors are seeking to hedge against an unpredictable global economic landscape, where collaboration among major economies seems to be giving way to a more adversarial posture.

Yet, the perceived stability in copper and aluminum pricing raises questions about the strength and adaptability of these marketsBy February 4, copper was trading at around $9147.5 per ton—about a 0.85% decrease from pre-holiday prices—while aluminum held steady at $2619 per tonThis resistance to price declines showcases the relative robustness of these metals in the face of external pressures, not least of which arises from investor anticipations regarding economic performance.

However, such optimism must be tempered with caution, as major risks linger on the horizonThe World Bank’s latest economic outlook projects that the global GDP growth rate will be around 2.7% for 2025 and 2026. While these figures may seem modest, any significant downturn in developed economies could precipitate drastic declines in commodity consumption—particularly in metals which rely heavily on industrial activity and manufacturing.

Furthermore, rampant inflation within the United States presents another layer of complexity

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