ISTANBUL
A sharp decline was witnessed in the commodity market last week amid growing recession concerns and central banks’ hawkish monetary policies.
As part of efforts to rein in soaring inflation, central banks of several countries made aggressive interest rate hikes on Thursday: UK, Norway, Switzerland, Taiwan, South Africa, Indonesia and the Philippines.
The Bank of Japan, however, has not changed its ultra-loose monetary policy, becoming the only central bank in the world with negative interest rates.
The aggressive rate hikes have deepened recession concerns and led to a rise in stock sales in developed markets.
The US Federal Reserve raised its benchmark interest rate by 75 basis points for the third consecutive time to fight record inflation.
The Federal Open Market Committee (FOMC) unanimously decided to raise the target range for the federal funds rate to 3% to 3.25%.
The dollar index rose above the level of 114 again after 20 years, with the expectations that the central banks of developed countries will continue to increase their aggressive interest rates in the face of increasing inflationary pressures.
Gold, which last week saw its lowest level since April 2020 at $1,639 an ounce, fell by 1.9%. Silver fell 3.6%, platinum 5.7% and palladium 3.2%.
The declines were also seen in metals.
In the over-the-counter market, copper decreased by 4%, while aluminum down by 3.6%, and lead and nickel by 3.4% each.
Analysts said that declining copper demand in Europe due to production stagnation caused by the energy crisis may dominate market sentiment for a while.
With the easing of the protests that blocked the transportation line of copper in Peru, concerns about the supply have decreased.
The decline in China's aluminum imports caused a decline in aluminum prices.
The price of Brent oil decreased almost 5% on Friday as the rising value of the US dollar repelled buyers from the dollar-indexed oil, and interest rate hikes by major economies triggered demand uncertainty.
On agricultural commodities side, wheat traded on the New York Mercantile Exchange rose 2%, while cotton lost 6.8% and cocoa 4.5%.
Coffee and sugar posted rises with 2.3% and 0.5%, respectively.
