Gold, Wheat, Rice. The three most interesting commodities right now

There’s no shortage of egos cramming the op-eds and front pages.

So sometimes it pays to skip ahead to see what the commodities markets might be telling us about our world. Here are three tales that’ve just caught our eye:

1. Gold

Switzerland has a knack for avoiding strife, so why did President Karin Keller-Sutter suddenly rush to DC last week? She was, of course, responding to America’s new 39% tariffs, the highest on any developed economy. Why?

Pharmaceuticals, for example, make up half of all Swiss exports to the US thanks to big brands like Roche and Novartis — they’re exempt from the 39%, but only because there’s a separate national security investigation that could hit harder. President Trump wants pharma to cut prices and/or produce more in the US, and it’s duly announcing plans.

But the real Swiss curve-ball came when an obscure corner of US Customs and Border Protection wrote a letter to a DC law firm clarifying that Swiss 1kg and 100oz gold bars will also cop that new 39% US tariff. Who cares?

Most of us don’t stash bullion under our mattresses. That’s just bad lumbar support. But it turns out these two bar sizes above are the global standard for gold trading, and yes…

• Switzerland is the world’s gold refining hub, while
• The US (the world’s finance hub) still sits on easily the biggest stash of gold bars.

So this obscure customs letter was in effect slapping a tariff on one of the world’s financial arteries, and discouraging gold flows into the US right as the US (like everyone else) really wants more physical gold as a ballast amid choppy waters.

So gold futures flipped out accordingly, soaring to record highs until President Trump took to Truth Social to clarify that “Gold will not be Tariffed!” 

2. Wheat

Ukraine’s agriculture ministry just released figures suggesting its grain exports are down 55% year-on-year, partly due to heavy rains. Plus Russia’s wheat exports just hit their lowest levels since 2008 last month, due to bad weather and farmers waiting for better prices. And that’s right as Putin is demanding his sector increase exports 50% by 2030.

But perversely, Russia’s figures could’ve been worse if not for the Ukrainian land it’s now occupying, supplying about 3% of Russia’s total grain crop last year — Kremlin-installed authorities are trying to ramp that up on land abandoned by Ukraine’s fleeing farmers.

Ukraine has asked allies to sanction this stolen grain, but tracing is tricky, particularly when (as Ukrainian intelligence alleges) it’s blended with Russian grain prior to export. And wheat isn’t the only grain causing intrigue right now…

3. Rice

Global rice prices hit massive highs just 18 months ago, driven mostly by bad weather and (relatedly) India curbing its exports to keep prices low back home.

But those global prices have now plunged back to eight-year lows thanks to record harvests out of Thailand and Vietnam, plus India (the world’s top exporter) unleashing its own volumes again. But that means the world’s top rice buyer (the Philippines) has now suspended rice imports to help its farmers via higher prices! Feel that whiplash?

And while this has all played out, rice prices have somehow doubled again in Japan due to extreme heat, panic-buying, and government policy. And that’s a big deal for the world’s fourth largest economy, where rice is almost sacred.

So Japan’s government tapped its strategic rice reserves and parachuted political royalty (a young Koizumi Jr.) to help bring prices down, but even he couldn’t save the ruling party from an Upper House wipe-out last month.

So take your pick, dear governments: let prices climb too high and angry consumers will kick you out next election; let prices fall too low, and farmer protests will clog your streets.

So maybe let the market find that Goldilocks sweet spot? Hah, how quaint. Free markets prefer high trust and low tariffs, neither of which are in surplus right now.

Intrigue’s Take

So what can we glean from these commodity updates? Here are two thoughts:

• First, commodities are like geopolitical mood rings, offering real-time data on the kinds of pressure points now shaping power at home and abroad, and yet…
• Second, official efforts to engineer favourable outcomes can lead to oversteering, exacerbating the very volatility governments are scrambling to solve.

So governments are not only chasing that Goldilocks price target, but are having to do so with a Goldilocks level of government intervention, which itself shifts every day.