US dollar strength is smashing up all commodities, from oil and gold down to palm oil and rubber.Gold, Silver Slump, Leading Commodities Drop on Dollar, Growth: “Gold plunged below $800 an ounce, silver dropped as much as 12 percent and oil, corn and copper slumped as the dollar's rebound reduced the appeal of commodities after a six-year boom.
Palm oil tumbled as much as 9 percent, and rubber and wheat fell as the dollar headed for its longest winning streak in more than two years and on concern a spreading global economic slowdown will reduce demand for raw materials.
Commodities, measured by the Standard & Poor's GSCI index, have tumbled 21 percent from their record July 3, descending into a bear market. Oil traded near its lowest for more than three months, gold for eight months and silver for almost a year. Copper and corn reached six-month lows this week.”
“Pop!” said the bubble (just like all the other bubbles before it).
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Hey, Sparky.. er Ben... Your scary charts are the reason why commodities shall bounce back and the dollar shall eventually resume it fall from its last gasp rally.
I don;t take issue with the commodities bubble having popped, but that a "commoditized" viewpoint so to speak... we've all heard the popping sound already. Telling us what happens next - now there's a concept.
Do you foresee years of commodities malaise and the dollar index going to 140+ again? or are you content to continue to call the pop in commodities which has already happened.
Thanks.
In my Sunday night article entitled 'Investment Strategies for 'Peak Dollar', I write that last week was a parabolic rise in the US Dollar and outside of the Russell 2000, the financial sector, the consumer discretionary, home building a few other consumer sectors, the stock market really wasn't benefited. And I wrote of many technical factors why the Dollar Rally is over.
The USD/JPY tonight is turning down; and this is likely to cause EUR/JPY and the world markets to rise.
With higher commodity currencies, gold is going to rise.
I recommend that one go long SKF and DGP; and I recommend that one go short FXP, and EEV and XHB.
I also recommend that one invest invest in gold at BullionVault.com and GoldMoney.com
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