Mixed trend observed in commodity markets last week

ISTANBUL

As the trend toward the dollar, which is seen as a safe haven, is increasing, recession concerns boosted selling pressure in the commodity markets last week.

Concerns that economic activity will stagnate continue to have an impact on commodity prices. However, a partial recovery was observed in the commodity market last week, as macroeconomic data indicated that the recession pressure is not at an alarming level.

With these developments, the commodity market followed a mixed course with fluctuations last week, but there was not as intense selling pressure as in the previous weeks.

In the US, non-farm employment increased by 372,000 people in June, exceeding market expectations, while the unemployment rate remained unchanged at 3.6%.

Although the labor market remains strong indicates that the Fed will maintain its “hawkish” stance in monetary policies, the strengthening of expectations that inflation can be controlled continues to price positively in the markets despite the possibility of a recession.

Despite the selling trend in the bond markets, the dollar index, following the inflation concerns and the increasing demand for dollars as a safe haven, finished the week at 107 with an increase of 1.8% after reaching the highest level of the last 20 years with 107.8.


The ounce price of gold carried the downward trend for the fourth week in a row, falling to $1,742 with a 3.8% depreciation on a weekly basis. Gold fell to a 10-month low last week.

Silver, which saw its lowest level since July 2020 at $18.9 per ounce last week, also fell 2.8%.

Palladium rose 11.2% and platinum 0.9%. The rise in the palladium market continues with supply concerns.
Last week, the pound of copper, which saw its lowest level since November 2020 at $3.3458, finished the week with a depreciation of 4.2%.

Lead gained 1.8% and aluminum 0.2%, while nickel fell 3.3% and zinc 0.1%.

Concerns that the US is heading into a recession dominate copper trade.

Analysts noted that the decline is expected to continue as China, the largest producer of zinc, prepares to send its surplus production to Europe to fill the deficit caused by Russia due to the Ukraine war.

The barrel price of Brent oil, which fell to $97.2 due to recession concerns during the week, partially compensated for its losses with China's announcement of an infrastructure package worth $220 billion and strong US labor market data, but decreased by 4.7% to $105.5 last week.

Natural gas traded on the New York Mercantile Exchange finished the week with an increase of 5.9%.

A volatile course was dominated by agricultural commodities last week.

Wheat trading on the Chicago Mercantile Exchange rose 5.4%, corn gained 3% and rice 0.5%.

Sugar increased by 2.5%, cotton decreased by 1.8% and coffee down by 1.9%.
 


* Writing by Gokhan Ergocun