Last week, when the US Federal Reserve’s (Fed) monetary policy decisions and the concerns in the banking sector were intense, an upward trend was observed in the commodity market.
Analysts reported that although the US Federal Reserve (Fed) increased the policy rate by 25 basis points to the range of 4.75-5 percent last week in line with expectations, the dollar depreciated against other currencies and commodities after the decision text and Fed Chairman Jerome Powell’s statements. .
The use of the phrase “some additional tightening” would be appropriate to achieve a sufficiently tight monetary policy stance to return inflation to 2 percent in the Fed’s resolution text, instead of the phrase “expected to continue tightening”, was perceived as “pigeon” in the markets.
Analysts also said that concerns about the banking system in global equity markets continue.
While there is no significant change in the expectations in the money markets, it is expected that the Fed will cut prices by 100 basis points until the end of the year. It is estimated that the Bank will not change interest rates with an 80% probability at the next meeting.
Analysts pointed out that the mismatch between the Fed and market expectations increased the uncertainties, and said that volatility in the markets may increase in the coming period.
Gold fell 0.5 percent last week, while silver rose 2.8 percent, platinum 0.3 percent and palladium 0.4 percent.
With the concerns about the banking sector that started in the USA and spread to Europe, especially silver was in high demand as a “safe haven”.
The World Platinum Investment Council (WPIC) has predicted that the hydrogen industry may be the sector with the highest demand for platinum by 2040.
The rise in copper exceeded 3 percent
Base metals were also in a bullish trend last week.
In the over-the-counter market, copper rose 3.7 percent, lead 3.1 percent and aluminum 1.9 percent, while nickel decreased 0.7 percent and zinc 0.2 percent.
The depreciation of the dollar and signs of increased demand in China had a positive impact on copper. Singapore-based company Trafigura predicted that copper prices could hit a record this year as the recovery in Chinese demand risks depleting already low copper stocks.
China has also nearly doubled its aluminum imports from Russia in the year since the invasion of Ukraine.
Brent oil finished last week with a rise of 2.9 percent, and natural gas traded on the New York Mercantile Exchange lost 5.2 percent.
The increase in oil exports in the USA has been a supportive factor for Brent oil. The rise in Brent oil prices was due to the increasing concerns that the tension that rose after the drone attack on the US-led coalition base in Syria could cause a supply interruption in the region.
The increase in air temperature and the increase in the occupancy rates in natural gas tanks brought about a decrease in natural phase prices. Natural gas prices also fell due to increased US inventories and production.
Wheat prices fell with the renewal of the Grain Corridor Agreement
Agricultural commodities were generally optimistic, despite declines in wheat, soybeans and cotton last week.
Wheat and soybeans traded on the Chicago Mercantile Exchange fell 2.9 percent and 3.2 percent, while corn rose 1.6 percent and rice 4%.
Wheat prices fell with the renewal of the Grain Corridor Agreement.
In the Intercontinental Exchange (ICE), cotton lost 1.6 percent, coffee increased 1.6 percent, sugar 0.8 percent and cocoa 5.2 percent.
The continuation of the problems related to cocoa supply in Ivory Coast caused cocoa prices to rise.
While the expectations for corn demand with the recovery in oil prices caused an increase in prices, cotton prices decreased as a result of the increase in demand concerns along with global recession concerns.