Commodity prices turn downward last week

By Burhan Sansarlioglu

ISTANBUL (AA) - Commodity prices saw a downward trend last week on uncertainties over the Fed’s continued rate cuts as macroeconomic data showed that the US economy is maintaining its strength while a selling pressure came to the fore, leading to estimates for a slower pace in rate cuts.

The World Bank reported that global commodity prices are estimated to fall to their five-year lows next year due to abundance in oil. The report said that the global commodity prices would fall 10% from this year to 2026.

Meanwhile, the ounce price of gold broke a record at $2,790.14 on the ongoing tensions in the Middle East and the uncertainty over the US presidential elections, which will be held on Tuesday.

The ounce price of gold fell from its record high, completing the week at $2,736.6, down 0.4%, on reports that Israel’s attacks on Iran last weekend were more limited than expected, while gold demand in China fell in the third quarter due to record prices and the country’s stagnating economy leading to less jewelry consumption.

The value of gold’s demand rose 35% on an annual basis, exceeding $100 billion for the first time, and reaching a record high of 1,313 tons, while stronger demand and the risk of supply disruptions are estimated to give rise to platinum prices next year.

Silver fell 2.7% per ounce as demand concerns came to the fore since the US economy grew below estimates by 2.8% this quarter.

At the same time, the ounce prices of platinum and palladium fell 3% and 7.8%, respectively.

The pound price of copper declined 0.4% as Chinese industrial firms’ profits fell 27.1% year-on-year in September, marking it the sharpest decline of the year, while estimates that the Fed would take a more cautious approach to rate cuts contributed to the decline in copper, in addition to rising supply concerns as the Chilean miner Codelco increased its production

Meanwhile, the pound price of lead fell 0.5%, nickel 1.1%, aluminum 2.8%, and zinc 1.4% last week.

As for the energy group, the barrel price of Brent crude oil declined 3.6% last week as the geopolitical risk perception in global markets fell after Israel’s airstrikes on Iran, which did not target oil or nuclear facilities, while the widespread use of electric vehicles in China put pressure on Brent crude oil.

The price of natural gas on the New York Mercantile Exchange climbed 4% on estimates that temperatures may drop and demand for heating may increase.

At the same time, the pound price of sugar on the Intercontinental Exchange declined 0.4% after the Indian Sugar Mills Association asked to be allowed to export sugar due to surplus, while low oil prices contributed to the decline.

The ton price of cocoa differentiated among other agricultural commodities last week, as it rose 9.7% as heavy rains in Africa blocked access to cocoa-growing regions and contributed to increased cocoa-related diseases.

Meanwhile, the bushel price of wheat fell 0.3%, corn 0.1%, soybeans 0.2%, and rice 1.7% on the Chicago Mercantile Exchange last week.

On the Intercontinental Exchange, the pound price of cotton declined 0.6% and coffee 2.3% over the same period.

*Writing by Emir Yildirim