By David Hodari
LONDON--Copper prices dropped on Wednesday, with growing fears of global trade disputes souring sentiment across the metals complex.
The industrial metal fell 0.66% to $6,946.50 a metric ton in midmorning trade.
Gold prices also fell, ticking down 0.12% to $1,333.11 a troy ounce, pausing from their recent ascent after gaining 0.8% so far this week.
The pressure on metals prices came after the resignation of Gary Cohn, President Donald Trump's top economic adviser, late Tuesday.
Mr. Cohn, one of the key figures behind Mr. Trump's tax reform policy, said he was stepping down days after the president announced steel and aluminum tariffs that he had opposed.
"Gary Cohn's resignation has seen 'risk' come under pressure with stock futures leading the commodity complex lower... in the here and now we are likely to be in for a stormy few sessions," said Alastair Munro, a broker at Marex Spectron in a note.
The tariffs are intended to fulfill one of the Mr. Trump's campaign pledges to revitalize heavy industry in the U.S. However, any benefits from the tariffs will likely be outweighed by the rising prospect of a global trade war, analysts say.
"If Trump signs in those mooted 25% and 10% import tariffs on steel and aluminum, it might help the U.S. industry in the short term, but the tit-for-tat retaliation could undermine global growth and trade, lowering metals demand and that's what the market's focusing on right now," said Robin Bhar, head of metals research at Société Générale.
Mr. Trump also threatened to hit European Union car imports with additional tariffs.
"The threat of a trade war has to be more ominous than any small benefits," Mr. Bhar said.
International Monetary Fund Managing Director Christine Lagarde said on French radio Wednesday that the macroeconomic impact of a trade war would be serious if the U.S. took action and other countries were to retaliate.
Market participants were watching for fresh comments from Mr. Trump while also keeping an eye on U.S. jobs data due Wednesday, and Chinese import and export numbers expected Thursday.
Among other precious metals, silver was down 0.3% at $16.71 a troy ounce, platinum was down 0.7% at $962.55 a troy ounce and palladium was down 1.06% at $978 a troy ounce.
Among other base metals, aluminum was down 0.33% at $2,134 a metric ton, zinc was down 0.57% at $3,288 a metric ton, tin was down 0.26% at $21,357 a metric ton, nickel was down 1.57% at $13,430 a metric ton and lead was down 0.27% at $2,423 a metric ton.
Write to David Hodari at [email protected]