30.08.2026 17:10
During the week in the commodities market, expectations regarding the Fed's monetary policy and geopolitical developments were influential. While Warsh's hawkish messages pressured precious metals, wheat prices, rising due to shipment risks in the Black Sea, saw their highest level since July 2023.
Developments in the Middle East continued to influence commodity prices throughout the week. In addition to the US's new economic sanctions decisions against Iran, news that Washington was preparing to send diplomats evacuated from the region during the war back to its embassies in the Middle East helped to somewhat offset geopolitical risks.
INVESTORS THINK "POSITIVELY"
Expectations that diplomatic contacts between the US and Iran could resume, along with US Treasury Secretary Scott Bessent's failure to give a specific date for the "economic exclusion" operation announced against Iran, supported investors' focus on positive developments.
Macroeconomic data released in the US and statements from Fed officials were also decisive in the direction of commodity prices.
The personal consumption expenditures (PCE) price index, closely monitored by the Fed as an inflation gauge, rose 0.2% month-on-month in July, exceeding market expectations. The index rose 3.7% on an annual basis, while the annual increase in the core PCE price index, which excludes food and energy prices, was 3.3%.
Inflation continuing to remain above the Fed's 2% target strengthened expectations that the bank could raise interest rates in the coming period.
"HAWKISH" MESSAGE FROM THE NEW FED CHAIR
On the last trading day of the week, Kevin Warsh, speaking for the first time as Fed Chair at the Jackson Hole Economic Policy Symposium, delivered messages prioritizing inflation and exhibited a stance close to the "hawkish" wing in monetary policy.
Stating that the Fed's 2% inflation target is an inflexible and fixed principle, Warsh said current financial conditions are not yet tight enough.
Following Warsh's statements, the probability of the Fed raising the policy rate by 25 basis points at its September meeting increased from 35% to 60% in money markets, while expectations for an additional rate hike in December also strengthened.
The yield on the 2-year Treasury note, among the US bonds most sensitive to the policy rate, rose approximately 10 basis points on Friday to 4.35%.
With these developments, on a weekly basis, the US 10-year Treasury yield remained flat at 4.72%, while the dollar index rose 0.9% to 99.7.
GOLD'S THREE-WEEK WINNING STREAK ENDS
In precious metals, a negative trend was observed except for palladium during the completed week, with gains seen in the first part of the week giving way to a selling-heavy trend following Warsh's statements.
The spot gold price rose to $4,696.8 on Tuesday, its highest level since May 14, supported by the continued impact of the US Treasury's decision to increase long-term bond buybacks announced the previous week, a weaker dollar, and technical buying.
The continued demand for gold and other precious metal funds also supported the rally in the first part of the week. These funds saw net inflows of $4.21 billion in the week ending August 26, marking the highest level in about the last six months.
This data showed that investor demand for gold and other precious metal funds strengthened significantly during the completed week.
However, the better-than-expected US PCE price index reading limited the upward momentum in gold.
With Warsh's signals that additional steps might be needed to fight inflation, rate hike expectations strengthened, while short-term bond yields and the dollar index rose.
With a stronger dollar and high bond yields raising the opportunity cost, the spot gold price ended the week lower following sharp sell-offs on the last trading day.
Thus, despite reaching its highest level since May 14 in the first part of the week, the spot gold price ended the week lower, ending its three-week winning streak.
With these developments, among precious metals on a per-ounce basis, prices rose 5.3% for palladium, while silver fell 3.8%, gold 3.2%, and platinum 3.0%.
US TARIFF UNCERTAINTY AFFECTS COPPER PRICES
In base metals, uncertainty over potential US copper tariffs, demand expectations from China, and varying supply outlooks for individual metals led to divergent pricing.
Expectations that the US could impose tariffs on refined copper imports starting in 2027 continue to cause the metal to be directed toward US warehouses and reduce available supply in other markets.
During the week, after warrants were issued for 65,400 tons of copper in London Metal Exchange warehouses, available stocks fell to approximately 90,000 tons.
In base metals, over the completed week on the over-the-counter market, per-pound prices rose 1.2% for zinc, 0.3% for lead, and 0.3% for aluminum, while nickel fell 1.9% and copper 0.5%.
EXPECTATIONS REGARDING THE STRAIT OF HORMUZ LOWERED BRENT OIL
In oil prices, ship passages through the Strait of Hormuz, diplomatic initiatives between the US and Iran, and expectations regarding the Fed's monetary policy were influential.
Despite the US's new economic sanctions against Iran, expectations that diplomatic contacts could resume reduced the geopolitical risk premium in oil prices.
Iranian Revolutionary Guard Corps spokesman Brigadier General Hossein Mohibi said that in talks with Oman regarding the Strait of Hormuz, the two countries reached agreement on some issues, including their shares of revenues from the Strait.
Mohibi's statement that the opening of the Strait depends on the US accepting Iran's conditions strengthened expectations that ship passages in the Strait of Hormuz could increase.
US President Donald Trump also argued that the US has full control of the Strait of Hormuz and stated that the war with Iran would end very soon.
Warsh's remarks leaving the door open for rate hikes increased concerns about economic growth and energy demand, supporting the decline in oil prices.
In natural gas, forecasts that temperatures in the US would remain above seasonal norms during the first part of September had an upward effect on prices.
In addition to expectations that hot weather would increase natural gas usage for electricity generation, the 15 billion cubic feet increase in US natural gas storage for the week ending August 21 also supported prices. This increase remained below the 33 billion cubic feet five-year average.
Nevertheless, on a weekly basis, the price of natural gas in British thermal units rose 4.2%, while the Brent oil price per barrel fell 4.8%.
SHIPPING RISKS IN THE BLACK SEA RAISED WHEAT PRICES
In agricultural commodities, shipping problems in the Black Sea, concerns over US production and yield estimates, and adverse weather conditions in China were influential in pricing.
Wheat prices rose as tensions between Russia and Ukraine disrupted grain shipments via the Black Sea, with the December contract price on the Chicago Board of Trade reaching 790.3 cents per bushel, the highest level since July 2023.
Attacks on grain-laden ships, ports, and logistics infrastructure increased concerns that exports from the region could be disrupted.
In corn and soybeans, concerns over the effects of hot weather and excessive rainfall in the US on yields, along with strong export demand, supported prices.
Extreme heat and floods that have been affecting key corn and soybean production regions in China since mid-July have increased concerns about crop quality and yields.
Amid these developments, per-bushel prices on the Chicago Board of Trade rose 12.1% for wheat, 5.5% for corn, 3.9% for soybeans, and 2.5% for rice.
Cotton prices were influenced by concerns that hot and dry weather in the Xinjiang Uyghur Autonomous Region, which accounts for more than 90% of China's production, could reduce yields.
In coffee, expectations that supply reaching the market would increase as the harvest progresses in Brazil pressured prices, while Intercontinental Exchange certified arabica stocks falling to their lowest levels since 1999 limited losses.
Sugar prices declined as the Brazilian real's depreciation against the dollar strengthened expectations that the country's producers could increase exports. Forecasts that the European Union's 2026-2027 season sugar production could decrease by 19% annually limited the decline.
In cocoa, news that difficult weather conditions and inadequate field maintenance in the world's largest producer, Ivory Coast, could delay the start of the 2026-2027 main crop season by 8-10 weeks supported prices. Insufficient sunlight in Ivory Coast and Ghana lowering product quality and increasing disease risk also strengthened supply concerns.
In the US, on the Intercontinental Exchange, per-pound prices rose 3.5% for cotton, while coffee fell 3.1% and sugar fell 0.3%. The per-ton price of cocoa also ended the week up 10.0%.