Commodities Buzz: IMF metals price index down 4.5% since March with precious metals driving downside

The International Monetary Fund (IMF) has stated today that inflationary risks and associated tightening of monetary conditions have driven demand away from precious metals, whereas supply disruptions in the Strait of Hormuz have put upward pressure on prices for a subgroup of base metals. The IMF?s metals price index declined 4.5 percent between March and August 2026. Prices of precious metals drove the drop, with the gold price losing 9.1 percent and the silver price decreasing 17 percent as higher interest rates increased the opportunity cost of holding nonyielding assets and investors shifted toward more liquid, interest-bearing alternatives. On the other hand, the base metals price index increased 4.9 percent, influenced by supply constraints from the closure of the Strait, through which a large share of aluminum and sulfur (a key input for nickel production) transit. Futures markets suggest a modest increase of 2.3 percent in 2027.

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