Selling pressure continues in commodity market

By Burhan Sansarlioglu

ANKARA (AA) - The selling pressure in commodity markets continued last week amid persisting geopolitical risks and the strengthening of the US dollar.

Commodity markets are following a negative course under the pressure stemming from analysts' expectations of a hawkish stance from central banks.

In addition, the rising value of the US dollar index, which hit last week its highest level in almost 20 years, acts as a decisive factor in the course of commodity prices.

Analysts said concerns remain about inflationary pressures, geopolitical risks and the Chinese economy, adding that the effects of the high interest rate environment as a result of the tight monetary policies of central banks could be more severe.

The downward trend in gold continued last week with expectations that the Fed will act aggressively to tighten monetary policy.

The price of gold fell 1.8% last week and silver lost 5.7%, while palladium declined 2.3% but platin rose 0.6%.

The American economy surprisingly contracted 1.4% in the first quarter of 2022, contrary to the annual growth expectations of 1.1%, instigating fears of a recession in the US.

Last week, the prices of the international oil benchmark Brent crude increased 0.6% and natural gas 10.9% on the New York Stock Exchange.

Oil and gas prices rose amid reports of Russian natural gas company Gazprom halting gas delivery to Bulgaria and Poland, with Moscow claiming that the countries did not make payments in the Russian ruble.

In addition, reports of Germany possibly placing an embargo on Russian oil also caused the rise in crude prices.

* Writing by Ovunc Kutlu in Ankara