Commodity markets see increases over expectations of Fed rate cut
(MENAFN) Last week, commodity markets experienced notable increases fueled by growing expectations of a US Federal Reserve interest rate cut. Despite stronger-than-expected US non-farm payrolls, which added 206,000 jobs in June, these markets were impacted significantly.
The Institute for supply Management reported a drop in the manufacturing Purchasing Managers' Index to 48.8 percent in June, below market forecasts, indicating contraction in the utilities sector.
In base metals, the pound prices saw substantial gains: copper rose by 7.7 percent, aluminum by 0.4 percent, nickel by 0.3 percent, lead by 0.6 percent, and zinc by 2.2 percent. These increases were supported by new economic stimulus measures in China and expectations of rising demand.
Precious metals also saw strong upward movements: gold prices per ounce rose by 2.8 percent, silver by 7.1 percent, palladium by 5.5 percent, and platinum by 3.1 percent.
On the energy front, Brent crude oil prices climbed due to concerns over the Atlantic hurricane season and escalating tensions in the Middle East. Brent crude oil prices per barrel increased by 2 percent, contrasting with natural gas prices on the New York Mercantile Exchange, which fell sharply by 10.4 percent during the week.
Higher oil prices and growing demand expectations drove up corn prices, used notably in biodiesel production. Corn prices per bushel on the Chicago Mercantile Exchange fell by 0.8 percent, while wheat declined by 3.2 percent, soybeans by 2.5 percent, and rice by 0.2 percent.
In the agricultural sector, Vietnam's production concerns from dry weather and Brazil's increased coffee exports contributed to a 1.7 percent jump in coffee prices. Conversely, the pound prices on the Intercontinental Exchange fell by 2.2 percent for cotton and 1.1 percent for sugar, while cocoa prices surged by 1.3 percent per ton to close the week.
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