| It’s a common assertion on Wall Street: when the dollar strengthens, commodity prices soften. The logic makes sense. Most internationally traded commodities are priced in US dollars, as are benchmark futures such as Brent crude oil. So, a rise in the dollar increases the value of the same number of tonnes, barrels or bushels, all else equal.
In the real world, it’s not that simple and anyone betting a bullish dollar outlook will uniformly pressure commodities is asking for trouble. Some commodities are more sensitive to the dollar than others. A case in point is gold. Marketed as a hedge against a depreciating dollar, it has gained nearly 3 per cent in the past year, even as the dollar index rose 17 per cent...............................................Full Article: Source
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