Commodity markets experience surge in prices on positive US macroeconomic data

(MENAFN) Last week, commodity markets experienced a surge in prices, buoyed by the release of positive macroeconomic data in the United States. The data supported the prevailing expectation that the Federal Reserve would initiate interest rate cuts during the first half of 2024. Particularly noteworthy was the continued slowdown in the core personal consumption expenditures (PCE) index, which is regarded by the Fed as a key indicator of inflationary pressures.

Additionally, the Institute for Supply Management’s manufacturing Purchasing Managers’ Index (PMI) for February fell below market expectations, registering at 47.8. Similarly, the University of Michigan's consumer sentiment index dropped 2.1 points month-on-month to 76.9. These indicators collectively reinforced the anticipation of a more accommodative monetary policy stance by the Federal Reserve.

However, the copper market experienced a decline in prices due to increased production in Chile, a major copper-producing country. Conversely, nickel prices rose amid concerns over supply constraints. There are fears that the global nickel market may face a surprise deficit in 2024 if regulatory approvals for mining operations in Indonesia are restricted, according to analysis from Macquarie Group, an Australian financial services and infrastructure asset management company.

In terms of base metals, copper and lead prices fell by 0.7 percent and 2.9 percent respectively, while aluminum saw a 2.6 percent increase, nickel rose by 1 percent, and zinc edged up by 0.5 percent.

Turning to precious metals, gold prices surged by 2.3 percent and silver by 0.9 percent. However, platinum experienced a decline of 1.7 percent and palladium dropped by 2.1 percent. These fluctuations in prices reflect the complex interplay of supply, demand, and market sentiment in the commodities sector.


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