Fed expectations and geopolitical tension in global markets pressure commodity prices

The escalation of tension in the Middle East and the inflation data announced in the USA indicating that inflationary pressures remain strong have increased the interest rate increase expectations for the Fed.

High energy prices as a result of geopolitical developments in the region lead to continued inflationary pressures around the world, while rising bond interest rates and increased demand for the dollar put pressure on commodity markets.

On the other hand, the Fed's interest rate meeting is the focus of the markets this week. Following strong data on the employment market, rising inflation expectations and Fed Chairman Kevin Warsh's emphasis on determination in the fight against inflation, the probability that the Fed will raise interest rates this week has increased to 88 percent in the pricing in money markets.

Concerns that artificial intelligence companies will slow down the pace of technology development are also among the factors affecting pricing.

With these developments, sharp movements were seen in precious metals and base metals. Currently, on an ounce basis, silver is traded at $62.3 with a decrease of 3.3 percent, platinum is traded at $1757 with a loss of 2.3 percent, palladium is traded at $1,274 with a decrease of 2.2 percent and gold is traded at $4,284 with a decrease of 1.5 percent.

On a per pound basis, copper is sold at $6.3, with a 2.3 percent decrease, and aluminum is sold at $1.48, with a 2 percent decrease.

It could be a tough week for gold

Saxo Capital Commodity Strategy Head Ole Hansen, in his assessment to the AA correspondent, said, "Gold remained under pressure after the core inflation data announced above expectations in the USA on Friday last week, and today the sharp rise in crude oil prices increased concerns about inflation and bond yields." he said.

Stating that gold may have a difficult week with rising bond interest rates, the Fed meeting and rising oil prices, Hansen said that gold must rise above 4,400 dollars in order to see increases.

Hansen pointed out that these developments also affected copper prices and said, "Copper fell from the record levels it approached last week and fell below the support level of $ 6.5." he said.