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Commodity markets posted sharp swings this week as expectations that the US Federal Reserve could keep interest rates high for longer, geopolitical risks and supply-side factors drove heavy losses in precious metals and strong gains in energy products.

Escalating tensions in the Middle East, inflation worries triggered by rising energy prices and the prospect of prolonged monetary tightening shaped pricing across the board, with gold falling below $4,000 an ounce for the first time since July.

Precious metals slide as rate expectations build

On a per-ounce basis, gold fell 4%, platinum dropped 4.9%, silver lost 5.3% and palladium declined 6.5% over the week.

Gold fell below $4,000 an ounce for the first time since July. Silver touched $53, its lowest level since November 2025, while palladium sank to $1,039.55, the weakest price since June 2025.

Analysts said the view that higher oil prices could lift inflation and push central banks to maintain tight monetary policy weighed on precious metals, particularly gold. Concerns that elevated interest rates would dampen industrial demand were also cited as a factor behind the steep fall in silver, along with an expectation from the World Platinum Investment Council that platinum investment will remain weak. Forecasts that high borrowing costs could hit the automotive industry added to demand worries in palladium.

Copper diverges from other base metals

In over-the-counter base metals trading, copper fell 0.8%, while zinc rose 1.2%, aluminium gained 1.3%, lead advanced 1.5% and nickel climbed 3.3%.

Reports of rising copper inventories at the London Metal Exchange eased supply concerns for the metal and pushed prices lower. Aluminium prices increased as growing geopolitical risks in the Middle East raised worries about supply. Nickel gained on reports that Chinese producers in Indonesia could cut output, while a decline in domestic Chinese zinc concentrate production stoked supply concerns for zinc.

The International Lead and Zinc Study Group forecast a possible decline in global mine production of lead and zinc this year, which drove prices of both metals higher.

Brent and European gas jump on supply pressure

December Brent crude rose 6.5% on a per-barrel basis, with sharp increases continuing as fighting in the Middle East persisted.

On the Netherlands-based TTF hub, natural gas for November delivery rose 7.3% for the week on continuing disruption to shipping through the Strait of Hormuz and pressure from low storage levels ahead of winter. The megawatt-hour price climbed to 94 euros, the highest level since December 2022.

Grains ease on Russia-Ukraine peace hopes

On the Chicago Board of Trade, wheat fell 5.4% and corn dropped 3.9% per bushel, while soybeans rose 0.7% and rice gained 1.2%. Wheat hit $6.21 a bushel and corn fell to $4.53, both the lowest since July.

Supply concerns in wheat and corn markets continued to ease on optimism that a peace could be reached between Russia and Ukraine. The Economist reported that US officials had prepared a plan to end the war that includes a demilitarized zone in Donbas, an easing of sanctions on Moscow and Ukraine abandoning NATO membership.

On the Intercontinental Exchange in the United States, coffee rose 0.1% and cotton gained 0.4% per pound, while sugar fell 2.8%. Cocoa declined 1.5% per tonne.

Strong demand from China supported soybean prices, and falling coffee stocks in Europe and Japan lifted coffee. Cocoa prices fell as inventories in West Africa increased, while sugar dropped after the Indian government ordered state-owned fuel retailers to stop buying ethanol made from sugarcane from November 1.

Key takeaways

• Gold fell below $4,000 an ounce for the first time since July, dropping 4% for the week.
• December Brent crude rose 6.5% as Middle East fighting continued.
• TTF natural gas for November delivery climbed 7.3% to 94 euros per megawatt-hour, the highest since December 2022.
• Wheat and corn fell to their lowest levels since July on hopes of a Russia-Ukraine peace deal.