Banks soar while commodities experience volatility

With continuing geopolitical conflicts and high levels of inflation, the financial markets continue to endure volatility.

Consumers will be interested to note that the last week has been a particularly turbulent one for the commodities market, while it was a strong week for banks such as Bank of America and Goldman Sachs.

Kate Leaman, chief market analyst at AvaTrade notes the reason for the volatility in commodities and the success of banks.

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Leaman said, “Looking at our most rising table last week, palladium saw its value rise. This comes as the UK imposed sanctions on Russian metals, with the exception of palladium.

While the measures didn’t target Russian supplies of the precious metal specifically, broader concerns around possible disruptions have arisen as Russia supplies 30%-40% of palladium globally. As a result, palladium is on track for its biggest gain since March 2020.

“Elsewhere, Bank of America and Goldman Sachs also experienced an uptick in value. With the Federal Reserve’s decision to keep interest rates at 5.25-5.5% and the central’s bank indication of three interest rate cuts by the end of 2024, investors have adopted a bullish outlook on banks, resulting in their gains.

“What’s more, Snapchat has again witnessed an increase in its share price after a Wells Fargo analyst upgraded the social media stock to Overweight (Buy) from Equal Weight (Hold). The technology is reported to be up 78% since the start of 2023.

“On our most falling table this week, sugar saw its value plummet, retreating sharply from multi-years highs.

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“This follows Brazil, the largest sugar producer in the world, increasing its sugar production after heavy precipitation in key sugar producing regions. As well as this, another of the world’s largest sugar exporters, India, announced its intention to use more of its sugarcane crop to produce sugar instead of ethanol.

“As a result, sugar supply outpaced demand, leading to the fall in price.

“Pfizer also declined considerably, plunging to a 15-year low. This nosedive is a result of the drug company’s profit and revenue guidance falling short of expectations, discouraging traders from investing in the firm.”