Commodity markets experience varied trajectory last week
Date
1/16/2024 3:35:31 AM
(MENAFN) Commodity markets experienced a varied trajectory last week due to a range of influencing factors. Key among these were uncertainties surrounding the Federal Reserve's monetary policy, geopolitical tensions, production forecasts, weather-related events, and developments in the Chinese economy.
The impact of major banks reducing interest rates continued to reverberate through commodity markets, contributing to the overall uncertainty. In the US, a tight labor market and unexpectedly high inflation were highlighted as significant factors affecting asset prices based on recent data.
Ongoing geopolitical risks in the Middle East also played a role in shaping commodity prices, with analysts noting that the heightened risk perception was contributing to increased demand for gold.
Following the release of data showing the US Producer Price Index (PPI) below expectations, the price of gold experienced a surge on Friday. This was fueled by growing expectations that the Federal Reserve would initiate interest rate cuts in March.
In response to these developments, the price of gold per ounce increased by 0.2 percent, while silver experienced a 0.1 percent decline. Platinum and palladium, on the other hand, faced more significant losses, with declines of 5.8 percent and 5.2 percent, respectively.
Notably, officials from the People's Bank of China (PBoC) hinted at the possibility of a new round of monetary easing utilizing the bank's reserves, impacting base metal prices.
China's annual exports surpassed expectations with a 2.3 percent increase, providing a positive outlook for demand in the market.
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