Inflation Data and Geopolitical Tensions Shake Commodity Markets

US inflation data came in below forecasts, intertwining with rising geopolitical tensions to shake commodity markets.

Fed’s Policy Signals Amid Cooling Inflation

■CPI monthly -0.4% (annual +3.5%) missed expectations.

■PPI monthly -0.3% (annual +5.5%) also undershot.

■Fed Chair Kevin Warsh stressed commitment to restoring price stability.

Geopolitical Frictions Fuel Energy Rally

■Brent crude jumped 14.2% weekly, marking its fastest weekly gain in 19 weeks.

■Strait of Hormuz flow disruptions amplified the geopolitical risk premium.

■US commercial crude inventories fell 1.7 million barrels, gasoline 1.5 million barrels, refinery utilization rose to 96.2%.

Precious Metals Under Pressure

■Gold slipped 2.2% per ounce, silver 6.6%, platinum 2.3%, palladium 2.2%.

■Dollar index down 0.2% to 100.8, 10‑year Treasury yield steady at 4.55%.

Base Metals and Agricultural Mixed Moves

■Nickel +2.3%, aluminum +0.7%, zinc ‑2.4%, lead ‑0.7%, copper ‑0.2% (LME).

■Wheat +7%, corn +1.6%, rice +1.3%, soybeans +1% (CBOT).

■Coffee ‑3.9%, cotton ‑3.6%, sugar ‑0.4%, cocoa ‑7.5% per tonne.

China’s Slowdown and Global Demand Outlook

■China Q2 GDP grew 4.3% YoY, below forecasts – the weakest pace in 3.5 years.

■Soft domestic demand and Middle‑East risks weighed on zinc via weaker construction‑steel demand.

Fatih Kılıç – Lead Data Scientist, Economic Indicators: While US inflation prints undershot expectations, geopolitical risk premia kept oil prices elevated, supporting real yields and weighing on precious‑metal returns. The Fed’s restrictive stance, paired with a modest dollar dip, suggests near‑term commodity performance will hinge on geopolitical developments.