Commodity Prices Point to Moderate Global Growth, QNB Says

QNB noted today that commodity prices suggest a moderate pace of global economic growth going forward, despite lingering concerns about the potential inflationary effects of tariff policies adopted by the current US administration.

In its weekly report, the bank said that the performance of a commodity basket points to a soft landing, a path of moderating global growth alongside a continued decline in inflation. This scenario, it added, is reassuring against the backdrop of a turbulent political environment.

The report said that most industrial inputs are currently trading within a stable range, far below their 2022 peaks, which supports the view that growth will slow and inflationary pressures will remain contained.

According to the report, the global economy is adapting to a more restrictive trade environment, leaving economists and investors increasingly cautious, particularly after the disruptions seen in the first half of 2025 and the uncertainty surrounding US tariffs.

It added that the first rounds of US trade deals have not been sufficient to ease the uncertainty regarding economic policies.

The bank emphasized that commodity prices remain a more accurate indicator for assessing the strength of global demand, estimating inflationary pressures, and understanding investor sentiment.

Recent movements in commodity prices, seen as a direct indicator of the health of the economy, point to expectations of moderate economic growth and lower chances of severe inflation ahead.

This assessment is based on several factors. Chief among them is that commodity prices remain well below the highs of May 2022, and have been trading in a relatively narrow range since the start of 2025.

The current stability in commodity prices suggests that the economy is neither experiencing a sudden acceleration in growth nor heading toward a sharp slowdown or recession. At the same time, the steady prices of key commodities such as energy and metals are helping sustain the decline in inflation, despite the weaker US dollar and the imposition of new tariffs in the United States.

At the same time, stable commodity prices reflect the resilience of global demand, particularly in the construction and industrial sectors.

In this context, the report noted that base metals such as copper, aluminum, nickel, tin, and zinc have recorded notable gains this year, reflecting optimism about growth in emerging technology sectors in Asia, particularly in China, with a focus on the electric vehicle and artificial intelligence industries.

A second factor highlighted was the continued decline in the copper-to-gold ratio, a key market indicator of growth, inflation, and risk appetite. This decline, the report said, shows that investors remain cautious.

On the other hand, the bank pointed out a third factor: the continued rise in gold prices, which reflects growing geopolitical uncertainty and investors' preference for safe-haven assets. This trend does not necessarily indicate slower inflation or stronger market demand.

Silver, meanwhile, has lagged behind. As both a monetary and industrial metal with key uses in green technologies, silver prices had underperformed until recently.

However, they have begun rising in recent months, keeping pace with gold's strong performance, suggesting that industrial demand may have reached its lowest point.

The report concluded by noting that if markets were expecting a broad-based economic recovery or high inflation, silver would typically outperform gold by a wide margin.