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<p>Geopolitical tensions between countries, particularly leading economies such as the US and China, significantly impact commodity markets. This study empirically investigates the dynamic and asymmetric impact of US-China trade tensions on crude oil (WTI) and gold prices, using a novel wavelet quantile on quantile regression (WQQR) approach over monthly data from January 1993 to February 2024. The WQQR method, combined with a robustness check via wavelet quantile regression (WQR), uncovers that US-China tension reduces oil prices in the short run but increases them over longer horizons, while gold prices consistently rise across all time frames. These findings imply strategic policy needs for energy security, inflation control, and investor hedging. The study recommends diversifying energy sources, reinforcing gold reserves, and fostering diplomatic stability to mitigate commodity market volatility induced by geopolitical shocks.</p>

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Assessing the Influence of US-China Trade Disputes on Crude Oil and Gold Prices: A Wavelet Quantile-on-Quantile Regression Approach

  • 期刊论文

  • 发表日期：

    2025年12月20日

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  • Tomiwa Sunday Adebayo,
  • Ummara Razi,
  • Oktay Özkan,
  • Qasim Raza Syed

摘要

Geopolitical tensions between countries, particularly leading economies such as the US and China, significantly impact commodity markets. This study empirically investigates the dynamic and asymmetric impact of US-China trade tensions on crude oil (WTI) and gold prices, using a novel wavelet quantile on quantile regression (WQQR) approach over monthly data from January 1993 to February 2024. The WQQR method, combined with a robustness check via wavelet quantile regression (WQR), uncovers that US-China tension reduces oil prices in the short run but increases them over longer horizons, while gold prices consistently rise across all time frames. These findings imply strategic policy needs for energy security, inflation control, and investor hedging. The study recommends diversifying energy sources, reinforcing gold reserves, and fostering diplomatic stability to mitigate commodity market volatility induced by geopolitical shocks.