Strong economic activity in US puts pressure on commodity market

By Burhan Sansarlioglu

ISTANBUL (AA) - With the ongoing strong economic activity in the US, which increased the demand for the dollar, and the predictions that the Fed may continue to increase interest rates, the selling pressure in the commodity market continues.

The downward trend in the commodity market continued last week as well.

Last week, expectations that the debt ceiling could be raised in the US, decreasing weekly jobless claims more than expected, the Philadelphia Fed Manufacturing Index, which exceeded forecasts, and the rise in bond yields strengthened the US dollar.

The slowdown trend, which is not at the desired level, in the labor market and inflation in the US, feeds the uncertainties regarding the Fed's future monetary policies.

International credit rating agency Moody's stated that the Fed is expected to maintain its restrictive monetary policy stance until the end of the year, lowering the interest rate, adding that it was unlikely to drop rates until early next year.

- Markets

The ounce price of gold, seeing the 45-day low level with $1,952, ended the last week at $1,978.

Silver dropped by 0.5%, while platinum rose by 1.1% last week.

World Platinum Investment Council forecasts that the demand for platinum will increase by 38% this year.

Last week, base metals were also dominated by a bearish trend.

While copper closed the week flat, lead lost 1.4%, nickel 5.7% and zinc 1.8%.

Aluminum, on the other hand, increased by 2.9%.

Last week, the barrel prices of Brent oil dropped by 2.3% while natural gas prices increased by 14.1%.

A mixed course was observed in agricultural commodities last week.

The price of wheat dropped by 4.7%, corn by 5.1%, soybean by 6.1%, and rice by 7.7%.

Wheat saw the lowest level since April 2021, while corn's price hit 20-month low level last week.

*Writing by Gokhan Ergocun​​​​​​​