Sharp Decline in Precious Metals Amid Fed Rate Hike Expectations
As the probability of the Fed raising interest rates this week climbed to 88 percent in the markets, rising bond yields and dollar demand caused significant declines in commodity prices.
Following tensions in the Middle East and inflation data, expectations that the Fed will raise interest rates this week reached 88 percent, leading to sharp losses in precious and base metals.
Geopolitical and Economic Developments Affecting Global Markets
Escalating tensions in the Middle East and recent inflation data released in the US clearly revealed that inflationary pressures maintain their strength on a global scale.
Fed's Interest Rate Policy and Market Expectations
Strong employment data, high inflation expectations, and Fed Chairman Kevin Warsh's emphasis on determination in the fight against inflation drew attention.
As a result of the assessments made, the probability of the Fed raising interest rates this week rose to 88 percent in money market pricing.
Declines Observed in Precious Metals
Following the economic developments, silver on an ounce basis is trading down 3.3 percent at $62.3, while platinum is trading down 2.3 percent at $1,757.
Additionally, palladium on an ounce basis continues to find buyers down 2.2 percent at $1,274, and gold down 1.5 percent at $4,284.
Price Movements in Base Metals
Alongside precious metals, base metals also took their share of the global pressure and witnessed sharp price movements.
On a pound basis, copper is trading down 2.3 percent at $6.3, while aluminum is trading down 2 percent at $1.48 in the market.