Commodities Dive To Record Lows, Dollar Wins Another Battle

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The war between the US dollar and commodities is still on and the dollar isn’t giving commodities a break.

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We commented in November that commodities would likely fall to record lows as the dollar kept strengthening. This is, indeed, what’s happening as the year ends.

USD Dollar Index since 2011

USD Dollar Index since 2011. Source: MetalMiner Analysis of StockCharts.com base chart.

The dollar is now stronger than anything we’ve seen since 2006. Moreover, we suspect that this could be just the beginning of a bigger move and that would have a long-term depressing effect on commodities and therefore, industrial metal prices.

CRB Commodities Index since 2011

CRB Commodities Index since 2011. Source: MetalMiner Analysis of Stockcharts.com base.

The last rise of the dollar was followed by a sharp decline in commodities as the recent crash of oil prices pushed most commodities down. Commodities are now at their lowest levels in 4 years and indicators are pointing to further declines as we enter 2015.

What This Means For Metal Buyers

At this moment, our analysis is pointing toward further declines in commodities as this bear market is still on. Don’t be fooled into thinking that your metals are a bargain, they might get cheaper in 2015.

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