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Credit rating firm Moody’s Investors Service has pared down its 12-month price outlook for a basket of metals and mining commodities, citing a global economic slowdown and softening demand.

Essential commodities affected include gold, silver, steel, aluminum and copper, as slack demand dents global growth momentum.

“China is a major consumer of base metals, coal and iron ore, and the largest steel producer globally,” said Barbara Mattos, senior vice-president with Moody’s, in a media release.

“A slowdown in the country’s economic growth would reduce demand across the metals and mining sector.”

The executive said volatile prices were “decreasing from the peaks of late 2021 and early 2022 but will remain historically high.”

Alongside the lowered price expectations, Moody’s said supply would remain tight for most base metals during the coming 12 months. Production has lagged demand, and supply chain issues have further disrupted production.

While gold is often seen as a hedge against inflation, Moody’s noted that rising interest rates and bond yields also increased the opportunity cost of holding gold, which yields no interest, reducing its value.