Commodity markets rally week on Fed’s rate cuts

By Burhan Sansarlioglu

ISTANBUL (AA) - Commodity markets saw sharp rises last week as expectations for an interest rate cut by the US Federal Reserve increased.

Non-farm payrolls in the US exceeded expectations, having increased by 206,000 people in June, affecting the prices.

The manufacturing Purchasing Managers' Index of the Institute for Supply Management dropped to 48.8% in June, below market expectations, signaling a contraction in the utilities sector.

The pound price of copper rose by 7.7%, aluminum 0.4%, nickel 0.3%, lead 0.6%, and zinc by 2.2% last week.

Base metal prices also rose sharply on the back of new economic stimulus in China and forecasts for a further increase in demand.

As for the precious metals, the ounce price of gold rose by 2.8%, silver 7.1%, palladium 5.5%, and platinum by 3.1%.

On the energy front, Brent crude oil prices rose due to concerns over the hurricane season in the Atlantic basin as well as rising tensions in the Middle East.

The barrel price of Brent crude oil climbed by 2%, while the price of natural gas traded on the New York Mercantile Exchange fell by 10.4% last week.

- Corn affected positively by hike in oil

Higher oil prices and rising expectations for demand have led to an upward trend in the price of corn, which is used for biodiesel production.

The bushel price of corn traded on the Chicago Mercantile Exchange fell by 0.8%, wheat 3.2%, soybeans 2.5%, and rice by 0.2%.

Meanwhile, Vietnam's ongoing production concerns due to dry weather and Brazil's increase in coffee exports affected coffee prices which jumped by 1.7%.

Also, the pound price traded on the Intercontinental Exchange fell by 2.2% for cotton and 1.1% for sugar, while the ton price of cocoa surged by 1.3% to end the week.

* Writing by Sahika Olgun.