Commodity prices resume their downward trajectory despite efforts from Swiss authorities on the weekend to rescue troubled Credit Suisse with the help of UBS Group, and central banks boosting dollar liquidity. Crude oil prices declined after an early advance and copper has been stable after losing an initial 1.2% gain. Gold, meanwhile had benefited substantially from the banking turmoil with a surge toward $2,000 an ounce last week, signaling a demand for safe havens. On average, commodities lose a quarter of their value after hitting a record last year following Russia’s invasion of Ukraine. Concerns over global recession risks, higher interest rates and a big selloff in natural gas pushed prices down. The trouble in the banking sector, starting with the collapse of Silicon Valley Bank and several other U.S. lenders and the subsequent crisis at Credit Suisse, deepened the rout.

As financial markets have been bracing a crisis of confidence, the Swiss government moved to broker a deal for Credit Suisse with USB acquiring its rival, including potential losses. The Federal Reserve and five other central banks also announced coordinated action to boost liquidity in US dollar swap arrangements.

Still, market participants are not fully convinced if recent moves by authorities would stop the bleeding.

The slump in commodities has come despite China’s rapid economic revival after officials ditched the Covid Zero policy late last year. Beijing cut the amount of cash banks must keep in reserve at the central bank last week to support lending and strengthen the recovery.

Regarding this week, the trajectory of commodities will mostly depend on how the Credit Suisse deal is received once the details are fully understood, as well as on the outcome of a Federal Reserve rate-setting meeting on Wednesday. Although US policy makers had signaled their willingness to raise rates by 50 basis points to contain still-hot inflation before the banking crisis erupted, market watchers now expect a smaller increase, or perhaps even a pause.

In their weekend statement, the Fed and partner central banks said they’ll increase the frequency of seven-day maturity operations from weekly to daily. The new arrangements will act as “an important liquidity backstop to ease strains in global funding markets,” they said.