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Commodity markets faced selling pressure this week as expectations that the U.S. Federal Reserve will keep borrowing costs higher for longer, combined with concerns over global growth, dampened demand prospects.

Precious and base metals posted broad weekly declines, while energy prices moved in mixed directions and agricultural markets searched for direction on the Chicago Board of Trade and ICE.

Fed expectations drive metals sell-off

High inflation in the United States reinforced views that the Fed needs to keep borrowing costs elevated for a longer period. That shift in expectations triggered selling across commodity markets, with industrial metals taking the hardest hit.

Although the Fed is still widely expected to leave interest rates unchanged this month, hawkish expectations for upcoming meetings raised concerns about demand. On an ounce basis, silver fell 6.3 percent, platinum 3.4 percent, palladium 3.2 percent and gold 0.7 percent over the week.

Silver touched its lowest level in three months at 55.4 dollars per ounce, while platinum hit a three-month low of 1,598.20 dollars. Palladium dropped to 1,092 dollars per ounce, its weakest level since August 2025.

Gold still closed the week lower despite falling bond yields and a weaker dollar index, as projections of continued tight monetary policy from the Fed outweighed those supportive factors. Forecasts of declining demand for conventional cars also contributed to the slide in platinum and palladium, while expectations of weaker jewellery demand in China added to the fall in platinum prices.

Base metals fall on supply relief and demand worries

Global growth concerns pushed copper and silver prices down. Easing supply worries added to the pressure on copper, as a preliminary deal with workers at Chile's huge Escondida mine is expected to avert a possible strike.

In over-the-counter trading this week, aluminium and zinc each lost 2.3 percent, nickel declined 2.2 percent, copper 2.1 percent and lead 0.2 percent. Rising aluminium production in Indonesia eased supply concerns and contributed to lower aluminium prices.

A drop in demand across the global stainless steel sector also pulled nickel prices down.

Energy prices move in mixed directions

Energy markets had a mixed week. Brent crude for December delivery ended the week 4.75 percent higher, as continuing conflict in the Middle East kept concerns about oil supply alive.

Natural gas traded on the New York exchange fell 3.2 percent in British thermal units terms during the week. Expectations of mild weather in the United States and high natural gas stockpiles in the country weighed on prices.

Grains and soft commodities diverge

On the Chicago Board of Trade, per-bushel prices fell 2.4 percent for soybeans, 1.7 percent for wheat and 1.2 percent for corn, while rice gained 2.2 percent. On Intercontinental Exchange in the United States, coffee rose 6.5 percent and sugar 3 percent on a pound basis, while cotton slipped 0.7 percent. Cocoa added 0.4 percent per tonne.

Higher Russian wheat supply pushed wheat prices lower, and an increase in the U.S. corn harvest weighed on corn. Faster U.S. soybean harvesting and high stockpiles in the country put pressure on soybean prices, while a stronger Indian rupee against the dollar and tighter rice supply due to climatic factors lifted rice.

Forecasts that the El Nino weather pattern could weigh on coffee and sugar production in Brazil drove sharp weekly gains in both. Rising cocoa grindings in Europe and Asia also pointed to stronger cocoa demand.

Key takeaways

• Silver fell 6.3 percent and platinum 3.4 percent as hawkish Fed expectations and growth fears drove metals prices down.
• Silver and platinum hit three-month lows, while palladium fell to its weakest level since August 2025.
• Brent crude gained 4.75 percent on Middle East supply worries, while U.S. natural gas fell 3.2 percent.
• Coffee rose 6.5 percent on El Nino production risks, even as wheat, corn and soybeans declined.