| After keeping its interest rates close to zero for six years, the Federal Reserve last week raised rates by 25 basis points. But other than oil, no other commodity in the global market has reacted sharply. In the case of oil too, the reaction was partly due to the news of higher US crude inventories. The key reason for the Fed rate hike turning a non-event for commodities was that the news was already discounted by the market.
Commodities from oil to base metals and gold have been in a freefall since 2012, even as the US Fed began to talk of tighter money policies. The US Dollar index (which measures the value of the greenback against six major currencies) has rallied since then to hit the 100-mark, gaining 24 per cent. Copper and aluminium have dropped 30 per cent and gold has plunged almost 50 per cent...............................................Full Article: Source
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