Commodity markets continue to plunge with Fed rate hike

ANKARA

Commodity markets continued last week to plunge with the US Federal Reserve rate hike priced in by investors.

Selling pressure in commodity markets that was seen in April has carried on in May. The Fed last week announced a 50-basis point rate hike, its steepest in 22 years. The Fed's monetary tightening policy had an impact on decline in commodity prices.

Fed Chair Jerome Powell stated in his post-meeting conference that additional 50 basis points of rate hikes are on the table for the next meetings.

Last week, the price of corn fell 3.5%, while soy bean lost 3.7% and rice decreased 2.8%.

For precious metals, the price of gold declined 0.8% and silver fell 1.9%, while palladium plummeted 11.7% last week.

Copper saw a loss of 4.6%, lead decreased 1.9%, aluminum dove 6%, and zinc sank 9.8%.

While precious metals were on decline before the Fed's meeting last Wednesday, their price decline became steeper after the central bank's decision.

In addition, China struggling with rising number of COVID-19 cases also create demand worries, causing a plunge in metal prices.

Oil prices, on the other hand, saw gains last week after OPEC+ announced its decision to raise its crude production by 432,000 barrels per day in June.

However, this increase is regarded as inadequate against soaring global demand, while the market imbalance continues to have upward pressure on oil prices.

As a result, price of international benchmark Brent crude rose 5.8% last week.