By Burhan Sansarlioglu
ISTANBUL (AA) - Commodity markets enjoyed a positive trend last week after statements by US Fed Chairman Jerome Powell and positive news on China's COVID-19 policy.
Commodity markets started last week in negative territory with nationwide protests against China’s zero COVID-19 policy.
Protests of the COVID-19 measures spread throughout the country after 10 people lost their lives in a fire in a quarantine building in Urumqi in the Xinjiang Uyghur Autonomous Region.
With statements by Powell and signs of relaxation in the policy by China, commodities started to rise and saw a buyers’ course.
Powell said it makes sense to soften rate hikes a bit while approaching the level of tightening sufficient to reduce inflation.
Continuing their verbal guidance, the majority of Fed officials are also keen on slowing down interest rate hikes.
Despite rising COVID-19 cases in China, signs of an eased policy and the government granting funding to construction companies also helped the demand for commodities.
Last week, gold gained 2.4%, silver 7.9%, palladium 2.3%, and platinum 3.5%.
In the over-the-counter market, copper rose 2.1%, lead 1.9%, aluminum 4.2%, nickel 10.3%, and zinc 4.7%.
Brent oil rose 2.1% last week, while natural gas traded on the New York Mercantile Exchange fell 10.6%.
The easing of demand concerns in the US, the world's largest oil consumer, helped fuel the rise in Brent oil prices.
A forecast for a decline in US crude oil stocks also pushed up prices with the perception that demand in the country has strengthened.
Natural gas prices, on the other hand, fell due to strong natural gas production in the US and uncertainty about the weather.
- Agricultural commodities
Agricultural commodities fluctuated last week.
Wheat on the Chicago Mercantile Exchange fell 4.5%, corn 3.7%, and rice 2.7%, while soybeans rose 0.2%.
Cotton rose 5.8%, sugar 1.5%, and cocoa 2.1%, while coffee fell 1.5%.
While a decline in world cotton production forecasts pushed up cotton prices, soybean prices climbed as rising crude oil prices boosted the demand for biofuels.
Zafer Ergezen, a futures and commodity markets expert, told Anadolu Agency: "The decline in the dollar index, falling below the 105 level, reduces the selling pressure on asset prices."
Ergezen said the selling course continued after it became clear the Istanbul Grain Corridor agreement brokered this summer by Türkiye and the UN will continue in wheat and corn markets.
On the fall in rice prices, Ergezen said an increase in production estimates by the UN Food and Agriculture Organization increased pressure to sell.
Ergezen said the recovery in oil prices was also reflected in sugar.
Stating that coffee ended last week down, Ergezen said: "Expectations that there will be a surplus in production in the new season continue to move coffee markets."
* Writing by Gokhan Ergocun