While the positive course of the US-Iran negotiations and the acceleration of shipping traffic in the Strait of Hormuz reduced the geopolitical risk premium caused by conflicts in the energy markets, Brent oil prices fell to pre-war levels.
In the US, the core personal consumption expenditure price index, which the Fed closely monitors as an indicator of inflation, rose 0.3 percent on a monthly basis and 3.4 percent on an annual basis in May.
Although expectations that the Fed could raise interest rates by year-end eased slightly following the data, the strong dollar index continued to put pressure on commodity prices.
Due to these developments, the US 10-year bond rate fell about 10 basis points compared to the previous week to close at 4.37 percent, while the dollar index maintained its strong stance and reached 101.5, testing its highest level since May 13, 2025. The index rose 0.5 percent weekly.
Strong dollar pressure on precious metals
In the week that ended in precious metals, expectations that the Fed will maintain its restrictive monetary policy and the rise in the dollar index weighed on prices.
While expectations that interest rates will remain high reduced demand for non-interest-bearing precious metals, the strengthening of the dollar index increased the cost of these products for investors using other currencies.
The gold ounce price tested below the $4,000 mark during the week and closed the week at around $4,000.81.
The fact that silver is both a precious metal and a commodity sensitive to industrial production impacted its tougher sales compared to gold.
With these developments, precious metal prices fell on an ounce basis by 9 percent for silver, 4.2 percent for palladium, 2.2 percent for platinum and 1.8 percent for gold.
Chinese demand and base metal inventories were monitored
In base metals, the strong dollar, concerns about Chinese demand and high inventory levels had a positive impact on pricing.
The appreciation of the dollar index increased selling pressure as dollar-denominated industrial metals became more expensive for buyers using other currencies.
The decline in aluminum prices was due to lower energy and raw material supply risks in the Middle East, high production levels in China and the availability of visible inventories to meet demand.
For copper, shipments into the country ahead of possible tariff decisions on U.S. metal imports increased inventories in COMEX warehouses, and high prices in China limited physical purchases.
The increase in refined copper production in China and the decline in imports of unprocessed copper have weakened the near-term demand outlook.
On the other hand, expectations that investments in data centers, power grid renewal and energy conversion will support copper demand limited the deepening of losses.
In the over-the-counter base metals market, prices in pound terms fell 5.8 percent for aluminum, 4.2 percent for nickel, 3.2 percent for copper, 2.5 percent for lead and 1.9 percent for zinc over the week.
Brent oil remains at pre-war levels
In the energy sector, the reconciliation process between the USA and Iran and the acceleration of tanker traffic in the Strait of Hormuz pushed oil prices down, while hot weather forecasts in the USA supported natural gas prices.
News that US-Iran talks are going well and an increase in ship passages in the Strait of Hormuz have bolstered expectations that oil shipments from the region will normalize.
With these developments, the supply disruption premium added to oil prices during the conflicts was largely refunded, while Brent oil fell to prewar levels.
On the other hand, the fact that traffic on the Bosphorus has not fully normalized, the ongoing security risks in the region and the uncertainty about whether the negotiations will result in a permanent agreement limited the fall in prices.
The strong dollar and concerns that global oil demand could slow were other factors that put selling pressure on Brent oil.
Natural gas, on the other hand, favorably contradicted forecasts that temperatures would be above seasonal norms in the central and eastern parts of the United States.
On the other hand, the fact that U.S. natural gas inventories remained above the five-year average and production remained high limited the increase.
However, the price of natural gas in British thermal power plants rose 1.4 percent on a weekly basis, while the barrel price of Brent oil fell 8.5 percent.
Weather conditions were crucial for agricultural raw materials
For agricultural commodities, weather forecasts in the US Midwest, monsoon rains in India, the ongoing harvest in the Northern Hemisphere and excessive rainfall in West Africa moved to the forefront of pricing.
While forecasts of hot and dry weather for the US Midwest added to concerns over soybean product development, expectations of a revival in Chinese demand also contributed to the rise.
The acceleration of the wheat harvest in the Northern Hemisphere, the continuation of exports from the Black Sea region and the improving production outlook led to price pressure.
For corn, positive product conditions in the USA, high production expectations in Brazil and Argentina and the decline in oil prices put pressure on ethanol production margins.
With these developments, prices per bushel on the Chicago Mercantile Exchange rose 7.3 percent for rice and 1.1 percent for soybeans, while they fell 4.1 percent for wheat and 0.9 percent for corn.
Crop and product quality concerns due to excessive rainfall in key producing regions of Brazil in recent weeks impacted coffee.
For cocoa, the sharp increase was due to excessive rainfall in the production regions of Ivory Coast and Ghana, which increased the risk of flooding and plant diseases.
The inability of producers to use sufficient inputs due to the high cost of fertilizers and pesticides and the slowdown in sales for the new season also increased concerns about physical supplies.
While pound prices on the Intercontinental Exchange in the US rose by 3 percent for sugar and 2.3 percent for coffee, cotton fell by 4.4 percent. The price per ton of cocoa also ended the week with an increase of 20.5 percent.
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