Fed keeps rates at 3.5-3.75%, commodities mixed; GSCI up 11% in July
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The Federal Reserve left its benchmark interest rate unchanged at 3.50–3.75% on Wednesday. Commodity markets reacted unevenly: the S&P GSCI index rose nearly 11% for the month, driven by energy. Gold hovered near $4,060 an ounce with little monthly change, while silver and platinum declined.
Fed Decision and Energy Surge
The Federal Reserve held its key rate at 3.50–3.75%, with three dissenting votes for a hike keeping September tightening in play. The dollar slipped after the announcement. The S&P GSCI commodity index jumped nearly 11% in July, led overwhelmingly by energy. Gains in crude oil benchmarks reflected supply worries and robust demand.
Precious and Industrial Metals
Gold traded around $4,060 an ounce, unchanged for the month, as the risk of a rate increase capped recovery. Silver fell more than 3% to about $57, lacking a sustainable rebound. Platinum edged down to $1,590, while palladium added less than 2% to $1,245. Copper held above $6.3 per pound, up over 3% in July on supply deficits and energy-sector demand. Steel and iron ore weakened, with iron ore hitting a multi-week low amid weak steel margins and China’s property slump.
Agriculture: Wheat Leads
Wheat remained the standout, trading near 669 cents per bushel and up 13% for the month on threats to Black and Azov Sea shipments. Corn rose more than 6%. Coffee gained nearly 10% in July despite a 4% daily drop. Sugar shed 2%, and orange juice plunged 16.5% with no signs of recovery.
What's Next
The Fed’s next meeting is in September, with markets pricing a possible rate increase. It remains unclear whether commodity sectors can sustain gains if monetary policy tightens further.
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Fed keeps rates at 3.5-3.75%, commodities mixed; GSCI up 11% in July
