(Bloomberg) -- Commodities broadly declined on the prospects that a stronger dollar and potential trade disputes under a Donald Trump presidency will weaken the appeal of raw materials in global markets.

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Brent crude futures slumped as much as 2.5% in London, soybeans fell the most in a month in Chicago, while copper led most industrial metals lower. Gold also dropped.

With Trump clinching back the White House, a gauge of the dollar posted its biggest gain against major currencies since 2020, making raw materials priced in the US currency more costly for buyers in most countries. The likelihood of trade disputes with China are particularly concerning for agricultural markets.

“Overnight trading saw widespread losses across the commodities sector,” said Ole Hansen, head of commodities strategy at Saxo Bank. Markets believe a Trump presidency “is expected to bring about the promised tariffs on imported goods, particularly targeting China, potentially triggering a new wave of trade tensions and economic disruptions.”

Crude has already suffered a series of major price swings throughout October, a Trump win could mean that curbs on Russian exports are eased, while there may also be tighter sanctions on Iranian flows, RBC Capital Markets analysts wrote previously.

“US foreign policy is shaping up to be a potential factor for oil markets in the near term” over Iran, said Vivek Dhar, an analyst at Commonwealth Bank of Australia.

For metals, both a stronger dollar and the possibility of a deeper US-China trade war would create headwinds for prices, said Marcus Garvey, head of commodities strategy at Macquarie. Still, investors will also be mindful that Beijing could respond with stimulus measures to invigorate domestic demand.

Gold fell on dollar strength, though a number of analysts believe a Trump victory could be bullish for bullion in the longer run, fueled by US inflationary pressures and currency weakness in China.

“I think anyone who’s super high conviction on how it all nets out is much smarter than I am,” Macquarie’s Garvey said, referring to Trump’s possible foreign policy plans. “Or maybe being a bit naive.”

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--With assistance from Yongchang Chin and Jack Ryan.

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