Expectations of tighter monetary policy are weighing on commodity markets

The decline in prices is affecting most sectors

Published by Luca Sazzini. Oct. 2, 2026 .

Conjunctural Indicators Commodities Financial Week

Stampa

The strengthening of the US dollar, rising bond yields, and expectations of tighter monetary policies have exerted downward pressure on both equity and bond markets, as well as on the various commodity sectors.
The energy markets closed the week slightly lower, despite the new suspension of Chinese exports of refined products and the escalation of military tensions between the US and Iran. Oil prices were weighed down by the resumption of crude oil exports from the Saudi terminal of Yanbu and by a larger-than-expected increase in US inventories.

Prices of precious metals continue to decline, confirming their particular sensitivity to rising bond yields and expectations of tighter monetary policies.
Following last week's US PMI data, new European inflation data above expectations strengthened expectations of a more restrictive monetary policy by the ECB, increasing the opportunity cost of holding gold and silver.

The industrial metals sector was characterized by declining prices for both ferrous and non-ferrous metals. The movement was mainly driven by new data showing a slowdown in the growth of Chinese industrial profits in August, which renewed concerns over Chinese demand for metals.
Among ferrous metals, the sharpest decline affected iron ore, while among non-ferrous metals, nickel posted one of the most significant declines, weighed down by global oversupply, mainly due to high Indonesian production and still elevated inventories.

As for the food commodity sector, cereal and oil prices declined, while tropical commodity prices increased. The sharpest declines affected cereals, with corn, wheat, and soybean meal among the products experiencing the largest drops. The decline in corn prices was intensified by new USDA data showing US inventories well above expectations.
The rise in tropical commodities was mainly driven by coffee and sugar. Coffee prices increased amid concerns over the quality of the Brazilian crop due to high humidity. Sugar benefited from lower Indian production, which pushed inventories to their lowest levels in the past ten years and fueled expectations of a reintroduction of export restrictions.

NUMERICAL APPENDIX

ENERGY

The PricePedia Financial Index of energy products shows mixed short-term fluctuations.

PricePedia Financial Index of energy prices in US dollars

The energy heatmap shows a decline in the prices of oil, gasoline, and US natural gas, while butane prices increased.

HeatMap of energy prices in euros

PRECIOUS METALS

The Financial Index of precious metals shows an acceleration in the decline in prices.

PricePedia Financial Index of precious metal prices in US dollars

The precious metals heatmap shows a broad-based decline in prices.

HeatMap of precious metal prices in euros

FERROUS METALS

The ferrous metals indices point to price declines in both the European and Chinese markets.

PricePedia Financial Indices of ferrous metal prices in US dollars

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INDUSTRIAL NON-FERROUS METALS

The LME non-ferrous metals index shows a weekly decline in prices, while the SHFE index has not been updated due to the closure of Chinese markets for the National Day holiday of the People's Republic of China.