Strategy Video: The Next Leg for Oil and Gold Likely Rests with the Dollar
• Oil (CFD-based) has suffered its most consistent tumble in decades and closed on a weekly basis at 6 year lows
• Gold prices have worked into a terminal pattern just above the midpoint of decades worth of market range
• While supply-and-demand and speculative appetite are key determinants here, the Dollar may feed the next move
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Aggregate commodity measures stand at multi-year lows after months of heavy selling pressure. US oil has posted its most consistent drop in recent history on its way to a six-year low. Gold has pushed lower and is now flirting with a critical shift in the past decade's range. 'Traditional' factors have contributed to this. Supply-and-demand factors has played a key role in the energy market's drop while 'risk trends' have burdened precious metals. However, what determines whether this painful selling phase continues or turns for the entire asset class likely falls back on a different source - the Dollar. The Greenback is the pricing instrument for the bulk of deals made in the world's commodities, and its recent rise has certainly added to the lower cost for the natural resources. So, where should we look and what should we expect from commodities moving forward? That is the topic of this weekend Strategy Video.
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.