A recent market review reveals a sharp rise in the dollar and US bond yields impacting metals and commodities, while energy markets stay supported amid geopolitical tensions and supply risks, signalling complex shifts in global markets.
A sharp rise in the dollar and a jump in US bond yields weighed on metals over the past week, while Middle East supply risks helped keep energy markets supported, according to a market review cited by the Turkish outlet Sondakika.com. The same report said worries about inflation staying above target, together with firm oil prices, have reinforced expectations that major central banks, led by the US Federal Reserve, may keep monetary policy restrictive for longer.
US Treasury yields touched their highest levels since 2002 before easing slightly, with the 10-year note briefly reaching 5.34% and the 30-year bond 5.69%, the report said. The dollar index ended the week up 1% at 101.9, adding to the pressure on commodities priced in the currency. Data trackers cited in the related market summaries also showed that commodity prices were still moving sharply at the start of October, underscoring how unsettled the broader market backdrop remained.
Gold bore the brunt of the move. The report said the metal fell to as low as $4,111 an ounce at one stage, its weakest level since 5 August, before recovering some ground late in the week. Softer US inflation and weak non-farm payrolls briefly supported bullion, but that relief faded as investors judged that the Fed would stay cautious about cutting rates. The report also noted that silver suffered from higher yields, while weaker expectations for industrial demand added to the pressure, particularly in solar-panel manufacturing, where analysts said faster-than-expected reductions in silver use were dampening demand prospects.
Among precious metals, palladium fell 8% on the week, silver dropped 6.1%, platinum declined 4.6% and gold slipped 3.4%, with bullion ending the week at $4,141 an ounce, the report said. The broader message from markets was that higher real yields, meaning inflation-adjusted borrowing costs, continued to reduce the appeal of non-interest-bearing assets such as gold and silver. Analysts quoted in the report said the key question for bullion was how far the Fed would tolerate any further weakness in the labour market.
Base metals also finished lower as a firmer dollar, high energy costs and concern about global demand all weighed on sentiment. Copper drew some support from a 12.8% year-on-year fall in Chilean output in August and concern about a possible strike at Escondida, one of the world’s biggest copper mines, but that was not enough to prevent a weekly loss. The report said China offered a modest counterweight: its manufacturing purchasing managers’ index rose back above the 50 mark in September, signalling expansion, while the central bank cut a one-year funding rate for policy banks by 25 basis points.
In base metals traded over the counter, aluminium fell 5.4%, nickel 5.1%, zinc 5.1%, lead 4.7% and copper 2.9% over the week, according to the report. Energy prices moved in the opposite direction. Brent crude for December delivery rose 3.5%, helped by uncertainty around diplomacy between the US and Iran and by continuing supply risks in the Middle East. International Energy Agency chief Fatih Birol said crude exports from the region had improved sharply, but refined product shipments remained constrained, while attacks on refineries in Russia were tightening diesel supply.
On Friday, the G7 agreed to release a combined 100 million barrels of oil and petroleum products from reserves over four months, with a large share of diesel stocks due to be put on the market in the first 20 days, according to the joint statement cited in the report. In natural gas, US liquefied natural gas exports for September rose to 10.9 million tonnes, with 54% sent to Europe. Storage rose by 64 billion cubic feet in the week ended 25 September to 3.415 trillion cubic feet, leaving inventories 2.4% above the five-year average. Even so, December natural gas futures rose 1.2% on the week.
Agricultural markets were mixed. The US Department of Agriculture’s stock and crop data, together with harvest progress, pushed corn lower after inventories as of 1 September came in at 2.1 billion bushels, up 35% from a year earlier and above market forecasts. Soyabeans found some support from strong export sales, but new-crop supply capped gains. Wheat fell after US production estimates came in above expectations, while rice was pressured by the advancing harvest and soft demand for US supplies. On the Chicago Board of Trade, corn lost 5.9%, soyabeans 3.2%, wheat 2.9% and rice 1.4%.
Elsewhere, coffee benefited from concern that rain in Brazil during flowering may fall short, while a weaker dollar on Friday added to buying interest. Cocoa prices were held back by a surplus in the current season, although dryness in Côte d’Ivoire raised concern about the next crop. On the Intercontinental Exchange, sugar rose 7.6% and coffee climbed 4.4%, while cotton fell 4.8%. Cocoa ended the week down 0.2%.
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