Commodity Compass Weekly

The commodity narrative this week shifted from metals volatility to policy and geopolitics in the Americas.

Washington moved to quadruple low-tariff beef imports from Argentina to curb grocery inflation, alarming U.S. ranchers and signaling a deeper strategy to pull Argentina out of China’s orbit in soy and critical minerals. At the same time, Beijing advanced new barriers to foreign access in rare earths and battery metals, reinforcing strategic supply-risk themes.

Energy sentiment firmed on new U.S. sanctions targeting major Russian producers and fresh talk of refilling the SPR, while livestock markets reeled from the policy shock and grains stayed driven by harvest and export flows.

This week, the dominant headline driving the metals and broader markets was again the escalating U.S.–China battle over rare earth export controls. Beijing unveiled its most aggressive export restrictions yet — expanding the list of controlled elements from seven to twelve, adding rules on processing equipment and forcing exporters to apply for licenses. In Washington, U.S. officials blasted the move as a “global supply-chain power grab,” with Trade Representative Greer calling on China to roll back the curbs. China, in turn, accused the U.S. of stoking panic and distortion, rejecting Washington’s calls to unwind the restrictions. The metals complex had a strong week, until a Friday correction. Energy remained mixed, and grains found a slight rebound.

The dominant narrative pushing commodities this week was the escalating U.S.–China quarrel focused on rare earth export controls. China, citing national security, expanded restrictions on rare earth metals, magnets, and the technology associated with processing and refining, tightening its grip on key materials essential for aerospace, and defense. In response, President Trump threatened to impose 100% tariffs on Chinese imports starting November 1, escalating the trade war and rattling markets already grappling with supply chain risks. 

Markets shrugged off the US government shut down this week. Job and private sector employment data showed a decaying labor market, but investors saw it as more fuel for cheaper capital. As the major boards found new all-time highs this week, precious metals extended their rally as well—gold briefly surged to a new record as concerns about a U.S. government shutdown and sticky inflation elevated safe-haven flows. In base metals, copper caught a bid midweek as lingering supply disruptions—especially from the mudslide and forced outages at Grasberg—reignited deficit fears. All told, the week’s story hinged on diverging trends: energy under pressure from surplus expectations, metals riding supply constraints and safe-haven demand, and commodity subsectors reacting idiosyncratically to evolving fundamentals.

We started the week riding some momentum in oil, but by midweek WTI and Brent gave back gains after a deal to reopen the Kurdish-Iraq pipeline. The demand for precious metals continued throughout the week with gold making new all-time highs, silver closing in on its all-time highs. Both were exceptional, yet were outdone this week by platinum and palladium on percentage moves. On the ag side, grains mostly softened as U.S. harvest pressure mounted.

The Federal Reserve offered its first rate cut since December last week and spurred heavy buying into the precious metals complex later in the week. WTI and Copper and still in their own trading ranges. Harvest in the US kicks off while prices get a bounce.

President Trump also ratcheted up pressure on the Fed Chair to enact a “big rate cut now,” citing weakening producer prices and arguing that inflationary risks are receding. These dovish cues helped push the U.S. dollar lower this week, improving the outlook for commodities whose prices are dollar-sensitive.

Markets began September on edge, with investors highly attuned to U.S. inflation data and momentum toward a possible rate cut. Risk appetite was buoyed by an unexpectedly soft dollar into Friday, as rising expectations that the Federal Reserve could ease policy kept equities buoyant and sought to support commodity prices—particularly gold, which notched its strongest weekly gain in three months.

As the Executive Branch of the US Government continues to put pressure on the FOMC, markets are betting on easier money and lower rates. This pushed gold and silver into higher territory this week. Corn finally some a bounce this week while cattle continued to rise. The oil shale patch is worried about over-supply.

The markets awaited patiently all week for Jerome Powell's Jackson Hole comments on Friday. The dovish tone sent physical markets higher and the US Dollar lower. Cattle hit another new all-time high and we have reason to believe the move is not over.