Hi,
I'm new to this market.
I want to know how moment in Dollar price impact commodity(like Crude oil, Metals etc.) prices.
Regards
Jai.
Commodity prices are denominated in $ terms hence they have inverse relationship with each other..
i.e when $ is
going up, you need to pay
less numbers of $ to buy 1 unit of commodity.
And when $
goes down, you need to pay
more numbers of $ to buy same unit.
This is assuming other factors like demand supply, sentiments etc for commodity remains unchanged... otherwise, it is also possible that they both go in same direction.. ie. Natural gas prices going up in last 3-4 days.. when $ is also going up.. This is mainly due to shift in demand supply equation of natural gas. Winter is already around (it has already snowed in many places few days before the usual time), and last week, the Gas inventory has fallen in US. i.e. going forward, demand of GAS is going to go up.. and hence the relationship with $ is broken here..
Hope this answer your question..