Commodity prices rally last week amid tariff uncertainties, falling US dollar

ISTANBUL

Commodity prices rallied last week while the US tariffs caused uncertainties and the dollar fell amid President Donald Trump’s tariff war with China, giving rise to recession concerns and supporting the demand for safe-haven assets.

Analysts believe it to be impossible for the US to easily recover from the negative outcomes of its protectionist policies, while the US dollar weakened against other currencies, testing below the 100 level for the first time since July 2023, as the US Dollar Index fell to 99.014 last week—its lowest since April 2022.

Meanwhile, the US Consumer Price Index (CPI) declined 0.1% month-on-month in March and came in below estimates at 2.4% on an annual basis, marking the first monthly decline since May 2020. The country’s core CPI, excluding energy and food, climbed 0.1% on a monthly basis and 2.8% year-on-year in March, below estimates.

Gold reached a record high of $3,245.43 per ounce on Friday, up 6.6%, last week, as investors turned to the safe-haven commodity amid the declining US dollar, while silver climbed 9.1% after the sharp decline, completing last week at $32.3 per ounce.

Platinum and palladium rose 2.9% and 0.3% per ounce, respectively, last week, led by developments in the general trend of the precious metals market and trade war concerns, while concerns over the auto sector limited the growth.

Base metals, on the other hand, started last week on a negative trend due to tariffs and trade war concerns but ended the week positively after Trump’s 90-day tariff pause announcement and the decline in the US dollar index.

Copper increased 4.1%, nickel 3%, lead 0.5%, and aluminum 1%, while zinc fell 0.2% per pound last week.

Meanwhile, Brent crude oil declined 2.3% per barrel, falling as low as $58.22 on Friday last week—its lowest since February 2021. The decline was due to the pressure on oil induced by the tariff decisions between the US and China, which led to concerns that the global energy demand would decline, while the OPEC+ group plans to increase production.

The decline in the global energy demand affected natural gas, which fell 7.7% at the same time.

Meanwhile, wheat rose 4.8% per bushel last week due to unfavorable weather conditions in Russia, while expected droughts in the Black Sea region and the reports that Western Australia’s cultivation area will shrink by 9% led to supply risk concerns.

Corn gained 7.8%, while the US dollar fell and production forecasts in Brazil and Argentina contributed to the rise.

Soybean also rose 7.8% due to a special export of 121,000 metric tons to an unknown region, and while Beijing was tariffed, US soybean shipments remained stable.

At the same time, rice rose 3.3% per bushel last week.

Last week, coffee and cocoa prices fell 2.8% per pound and 1.5% per ton, respectively. Concerns over high US tariffs on Vietnam and West Africa persisted despite the pause, which gave rise to risks of market contraction for exporters.

Sugar fell 5.4% per pound due to rising global supply expectations and the decline in oil prices.

Cotton rose 5.8% per pound over the same period.