Commodity Markets Dominated By Uncertainty Last Week

Uncertainty persisted in commodity markets last week as the Fed's timetable for interest rate cuts was postponed, as well as climate conditions weighing on the prices.

According to analysts, concerns regarding the Fed's narrowing opportunities to implement policies to fight inflation have been effective on asset prices, and the estimates show that the bank's first interest rate cut has been postponed to the last quarter of the year.

US GDP data remained below expectations with an increase of 1.6, revealing increased concerns about stagflation in the country.

The Fed's interest rate decision and Fed Chairman Jerome Powell's statements are expected to impact commodity markets.

Precious metals see downward trend

Gold prices decreased as geopolitical risks in the Middle East eased and the demand for safe-haven assets fell.

The ounce price of gold lost 2.3%, silver 5.2%, platinum 2%, and palladium 6.9% last week.

Trafigura, the Singaporean commodity trader, estimated that the growing activity in the electric vehicle sector, energy infrastructure, artificial intelligence, and automation sector could lead to at least 10 million tons of additional copper consumption over the next decade.

Copper prices continue to rise as investors estimate that mining companies will struggle to meet the rising demand for copper.

Given these changes, the pound price of copper rose 1.5%, aluminum 3.7%, lead 0.3%, and nickel 1.1%, while zinc followed a flat course.

The pound price of copper reached an all-high since April 2022 at $4.58.

⁠Energy group sees upward trend

The US Energy Information Administration announced that US commercial crude oil stocks decreased by about 6.4 million barrels in the previous week.

Market expectations were that stocks would rise by 1.8 million barrels. Natural gas prices also increased with the rise in natural gas exploration costs.

In light of these developments, the barrel price of Brent crude oil hiked 1.7%, and natural gas traded on the New York Mercantile Exchange in British thermal units rose 13.6%.

Wheat prices rose on Ukraine's attacks on agricultural facilities, while heavy rainfall in Brazil led to a decline in coffee and sugar prices.

The bushel price of wheat traded on the Chicago Mercantile hiked 9.8%, corn 1.6%, and soybeans 1%, while rice fell 1%.

Cocoa prices fell due to over-supply concerns alleviated by increased exports in Nigeria.

The pound price of cotton traded on the Intercontinental Exchange rose 0.1%, while sugar fell 2%, coffee 3.7%, and cocoa 7.6%.

Writing by Emir Yildirim. -