Selling pressures in commodity markets

• Prices of metals and agricultural commodities fall sharply

Commodity markets faced selling pressure last week due to uncertainties over the upcoming US presidential election, concerns over the Chinese economy and rising agricultural production in Brazil, according to an analysis by Anadolu news agency.

According to it, as central banks around the world near the end of their fight against inflation, expectations for interest rate cuts are becoming clearer by the day. But uncertainty over the outcome of the US election has weighed on commodity prices, despite expectations that the Fed will implement three interest rate cuts this year.

• Gold at record level, then declines

The price of gold briefly hit a record high last week, above $2,483 an ounce, amid growing expectations that the Fed will begin cutting interest rates in September. However, the yellow metal later fell to $2,400.

The demand for dollars has negatively affected precious metal prices, according to the source cited.

Analysts noted that green energy investment in the US could be disrupted if Donald Trump is re-elected. As a result, silver and copper prices have fluctuated due to concerns about demand and their utility in green energy projects, respectively.

Last week, the price of gold fell by 0.4%, the quotation of silver - by 5.1%, platinum - by 3.9%, and the price of palladium - by 6.5%.

• Data on China's economy puts pressure on base metals

China's GDP rose 4.7% in the second quarter of 2024 at an annual rate, missing expectations, and the Asian country's retail sales rose just 2%, the slowest since December 2022.

Analysts suggest that the Chinese government may have to take additional measures to stimulate the economy.

The Chinese Communist Party (CCP) has yet to implement the expected economic reforms outlined in the third Plenary Session, leading to selling pressure on base metals, according to the analysis cited.

As a result, the price of copper fell by 8.1% last week, lead - by 3.8%, nickel - by 3.5%, and aluminum - by 14.9%.

• Sharp declines for agricultural commodities

Rice prices fell on news that India will lift restrictions on exports of the rice, easing supply concerns.

Corn prices also fell on demand concerns amid lower oil prices.

In light of these changes, the price of wheat traded on the Chicago Mercantile Exchange fell by 1.1% last week, corn - by 2.2%, soybeans - by 2.8%, and rice - by 2.7%.

Coffee prices fell as production concerns eased as rains extended in Brazil, with cotton and sugar also falling.

The price of cocoa beans fell significantly amid reduced supply concerns due to improved weather conditions in West Africa.

The price of cotton traded in the US fell by 0.7% last week, sugar - by 2.8%, and coffee - by 4.2%, while the price of cocoa beans lost 7%.

Algeria and Italy signed, on Saturday, an agreement worth 420 million euros, for an Italian investment project in the south of the largest country in Africa, mainly for the production of wheat and vegetables, and the consolidation of food security, they announced the two countries in a joint press release, according to AFP. The project will be carried out by the Italian group Bonifiche Ferraresi and the National Investment Fund of Algeria and will target the production of cereals and vegetables on an area of 36,000 hectares in the Timimoun province, it is stated in the press release, notes Agerpres.

The objective is the production of wheat, lentils, beans and chickpeas as well as the construction of processing units for the production of pasta and storage spaces. The investment will be started in 2024 and will allow the increase of food product exports and the creation of more than 6,700 jobs, the release also states. Through this project, Algeria wants to reach a situation of self-sufficiency in terms of durum wheat, by increasing the areas cultivated with this type of wheat up to 500,000 hectares in the south of the country.