Commodity prices plunge owing to rising global risk perception

ISTANBUL

The risk perception and concerns about global economic activity over the past week have led the sharp declines in the commodity market.

Last week's selling pressure signaled a hike in concerns about demand.

The ongoing debt limit crisis in the US, recession concerns, the uncertainties over the US Federal Reserve's (Fed) monetary policies, and the growing demand for the greenback were among the factors behind the selling pressure in the commodity market last week.

Less than a month left for the US Congress to address the $31.4 trillion federal debt limit to avoid the default.

"There would be very serious repercussions, not only for the US but also for the global economy should there be a US debt default," Julie Kozack, the director of communications at the IMF, said last week.

President Joe Biden and Treasury Secretary Janet Yellen in recent months both urged Congress to take swift action to raise the debt limit to avoid the US defaulting on its debt obligations.

Yellen warned last week that the looming federal government default may spark a global downturn.

Annual consumer inflation in the US eased to 4.9% in April, from 5% in March, according to official figures released last week.

The price of gold fell 0.3%, silver 6.6%, and platinum 0.8%, while palladium rose 1.2%.

For the base metals, copper lost 3.1%, lead 1%, aluminum 11.8%, nickel 9.6%, and zinc 3.2%.

Brent oil ended the week with a 1.6% decline, and natural gas traded on the New York Mercantile Exchange surged 6%.

Data from the world's top consumers last week, the US and China, heightened economic concerns and the trajectory of crude oil demand.

Wheat traded on the Chicago Mercantile Exchange edged down by 3.8%, corn 2.2%, and soybeans 3.3%, while rice went up 1.1%.

The price of cotton plunged 4.2%, coffee by 2.9%, sugar by 0.5%, while cocoa gained 1.5%.