OCBC Bank's economist, Barnabas Gan says in a commentary during a presentation

Gan says that there is plenty more downside for commodities should trade frictions between the US and China escalate into a full-blown confrontation. He highlights that the risk of losses in metals and oil could be as much as a third.

"Growth-related commodities could potentially perform as they would in a recessionary year, when oil and metals drop between 10% and 30%", Gan argues. Adding that a jump in haven demand may see gold above $1,600.

However, he notes that "at least for now, the trade tariff threats are merely just threats". While also saying that risk appetite could eventually recover should it stay "as a war of threats".

To put things into perspective, a 30% decline in oil will see it fall back to the mid-$40 levels while the last time gold prices surpassed $1,600 - it was back in 2013.