Volatile week in commodity markets: Gold falls, cocoa breaks record

Although commodity markets experienced temporary relief with the 90-day tariff reduction between the US and China, they had difficulty finding direction due to uncertainties in global monetary policies and the strengthening dollar index.

As a result of these developments, many precious metals, especially gold, closed the week with a loss of value.

While US Federal Reserve (Fed) Chairman Jerome Powell warned that the monetary policy strategy would be reviewed and that more permanent supply shocks could occur, investors began pricing in the Fed postponing its first interest rate cut until September. This weakened demand for gold, which does not yield interest.

The ounce price of gold dropped to $3,200, its worst weekly performance since November 11, 2024, due to the weakening safe-haven demand and the strengthening dollar due to the decline in tensions between the US and China.

On a weekly basis, there was a 2.7 percent loss in gold, 0.8 percent in platinum, 1.6 percent in palladium and 1.4 percent in silver.

DECREASE IN COPPER, INCREASE IN ALUMINUM

The picture was mixed on the base metals side. Although the temporary easing of trade wars supported global growth expectations, Trump’s threat of renewed import tariffs and high inventory levels in particular weighed on prices. Copper stocks, which have increased by 81 percent since the beginning of the year on the Chicago Board of Trade, caused prices to fall. Lead increased by 1 percent, zinc by 1.3 percent and aluminum by 2.4 percent on a weekly basis, while copper lost 1.3 percent and nickel by 1.6 percent.

OIL RISED, NATURAL GAS FELL HARD

Oil prices closed the second week higher on hopes of easing trade tensions and global growth. Brent crude gained 1.8 percent, while natural gas fell 12.4 percent, the week's biggest loss.

WHEAT COMES TO THE FORE IN AGRICULTURAL COMMODITIES

Agricultural commodities followed a mixed course with supply-demand balances and export news. The decision of Egypt and Russia to establish a joint committee for wheat trade drew attention in terms of supply balances in the Black Sea region. On a weekly basis, wheat gained 0.6 percent and rice 0.8 percent, while soybeans fell 0.1 percent and corn 1.5 percent.

COCOA BROKE A RECORD

In cocoa, the decline in yields, drought and logistics problems caused prices to skyrocket. While the price per ton of cocoa ended the week with an 18.9 percent increase, coffee fell by 5.7 percent, cotton by 2.2 percent and sugar by 1.2 percent.