Precious metals shine in commodity markets

The US Consumer Price Index (CPI) rose in June, in line with expectations at 0.3 percent month-over-month and exceeding expectations at 2.7 percent year-over-year. Monthly inflation reached its highest level since January, and annual inflation its highest level since February.

In the US, the Producer Price Index (PPI) remained unchanged on a monthly basis in June, but increased by 2.3 percent on an annual basis, below expectations.

Retail sales data for June pointed to a strong recovery. Retail sales rose 0.6 percent month-over-month, exceeding expectations. Following a sharp 0.9 percent decline in May, sales across many items rose in June.

On the other hand, Trump's statements regarding tariffs were also in the focus of investors.

Earlier this week, Trump's announcement that imports from the European Union and Mexico would be subject to 30 percent tariffs drove investors to safe havens while escalating global trade tensions.

Trump also announced that if an agreement is not reached to end the war in Ukraine within 50 days, 100 percent secondary tariffs will be imposed on Russia.

Analysts said concerns that Trump could immediately impose sanctions on Russia had eased with Moscow being granted an additional 50 days, and noted that prices in commodity markets, particularly those dominated by Russia, had risen due to supply concerns.

Following these developments, the US 10-year bond yield closed the week at 4.44 percent, and the dollar index rose by 0.6 percent to 98.5.

Precious metals test record levels

In a week that ended volatile due to intense news flow in precious metals, gold reached a three-week high, silver saw its highest level in nearly 14 years, platinum in 11 years, and palladium in two years.

The price of silver per ounce fluctuated throughout the week, reaching $39.13, the highest level since September 2011, but retreated from the peak and finished the week in negative territory.

Analysts pointed out that there is a supply deficit in the silver market and that demand, especially in the solar energy sector, is strong, and that silver's performance could catch up with gold.

The price of platinum per ounce maintained its upward momentum, hitting an 11-year high. Joining the overall rise in precious metals during the week, platinum climbed to $1,485.

Analysts stated that speculative purchases were influential in the recent rapid rise in the platinum market, and that the expected slowdown in physical demand and jewelry consumption in China could limit platinum prices in the third quarter.

The price of palladium per ounce also tested its highest levels in nearly two years. Rising to $1,342.71 during the week, it hit its highest level since June 2023.

The rise was driven by concerns that the Russia-Ukraine war could escalate and that supplies from Russia, one of the world's largest palladium suppliers, could be disrupted.

Analysts stated that demand for palladium may remain under pressure in the long term due to the transition to electric vehicle production and the increase in recycling resources, but prices may continue to remain high in the short term due to supply risks from Russia.

With these developments, prices of precious metals on an ounce basis increased by 1.6 percent for platinum, 2.1 percent for palladium, 0.2 percent for gold and 0.6 percent for silver.

MACROECONOMIC SUPPORT IN BASE METALS

While base metals experienced a mixed trend due to tariff concerns, macroeconomic data from China and the US influenced pricing.

China's economy grew by 5.2 percent year-on-year in the second quarter, exceeding expectations, easing concerns about base metals.

At the same time, strong retail sales and upbeat consumer confidence data from the US supported the demand outlook for base metals.

Copper prices, which soared last week after Trump announced a 50 percent tariff on imported copper, were partially suppressed last week when some copper cargoes destined for China were rerouted and reached the United States before the tariffs took effect.

Meanwhile, the Indonesian government negotiated an exemption for nickel exports from new US tariffs in trade talks with the US, but this development has not had a significant impact on prices. The recent oversupply in the nickel market and the slowdown in China's stainless steel sector continue to exert price pressure.

As a result of these developments, over-the-counter (OTC) prices for base metals this week saw copper and aluminum lose 0.2 percent and 0.1 percent, respectively, on a per-pound basis, while zinc gained 2.8 percent, lead gained 1 percent, and nickel gained 0.2 percent.

Ease of Supply in Oil Prices

During the week when oil prices were volatile, supply-related concerns and demand signals influenced pricing, while the rising dollar index put pressure on prices.

Trump announced that he would give Russia 50 days to end the war in Ukraine, at which point he could impose sanctions. This announcement initially sparked a surge in oil prices, but the fact that the sanctions would not take effect immediately allayed concerns about supply disruptions.

Geopolitical risks also influenced pricing, while supply concerns increased following unmanned aerial vehicle (UAV) attacks on oil fields in northern Iraq and Israel's air operations against Syria.

At the same time, geopolitical risks and strong seasonal demand also supported prices. Global oil demand averaged 105.2 million barrels per day in the first two weeks of July.

Weather conditions have been a determining factor in pricing in the natural gas market. With rising summer temperatures across the US, demand for air conditioners has increased, which in turn has increased natural gas consumption. US natural gas futures prices have diverged positively, particularly due to the heat wave predicted for mid-July.

With these developments, the price of Brent crude oil per barrel decreased by 2 percent, while the price of natural gas traded on the New York Mercantile Exchange in British thermal units (MMBtu) gained 6.8 percent.

AGRICULTURAL COMMODITY TARIFF TENSION

Agricultural commodities have been mixed, with tariff concerns, drought and harvest delays in key producing regions such as Russia and Ukraine, causing ongoing supply concerns.

Trump's plan to increase tariffs on agricultural products from Europe and Mexico is having an impact on pricing.

Strong processing activities for soybeans and corn, along with rising imports from China, are supporting prices, while drought and rainfall imbalances in South America are noteworthy.

With these developments, prices per kilogram on the Chicago Mercantile Exchange this week saw soybeans gain 2.7 percent, corn gain 3.3 percent, wheat gain 0.4 percent, while rice fell 3.3 percent.

While the coffee market continues to be focused on the high tariffs that the US announced to impose on Brazil, some importers tried to deliver Brazilian coffee to US ports before August 1 in order to avoid this tax.

On the Intercontinental Exchange, a commodity exchange operating in the U.S., prices per pound rose by 6.3 percent for coffee, 1.3 percent for sugar, and 2 percent for cotton. The price per ton of cocoa ended the week down 5.8 percent.