Does a weak dollar lead to rising commodity prices?

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dispassionate
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Does a weak dollar lead to rising commodity prices?

Post by dispassionate » Fri Dec 15, 2006 1:12 pm

Only asking as there was an article in the Investors Chronicle which proposed that it did. Wrong cause-effect relationship here or not?

http://www.investorschronicle.co.uk/con ... 05108.html

LeapFrog
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Re: Does a weak dollar lead to rising commodity prices?

Post by LeapFrog » Fri Dec 15, 2006 2:09 pm

dispassionate wrote:Only asking as there was an article in the Investors Chronicle which proposed that it did. Wrong cause-effect relationship here or not?

http://www.investorschronicle.co.uk/con ... 05108.html
Can't get to the article 'cause you need a key, but...

Depends which commodites we're talking about don't you think? The Metals, in particular Gold and Silver, didn't like the gain in the dollar today (12/15/06) or was that more a reaction to the low inflation numbers earlier in the day? Or both?

These causal explanations I find are best left to the pundits on CNBC - which of course I never watch. Sometimes it makes good locker room conversation - but it has never helped my trading. Two cents worth.

PaulZ
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Influence of Dollar on Commodities Prices

Post by PaulZ » Mon Dec 25, 2006 12:12 pm

It seems to me that commodities for hard assets such as metals, energies, etc. ought to go up/down when the dollar goes down/up for markets denominated in dollars.

nodoodahs
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Post by nodoodahs » Tue Dec 26, 2006 9:19 pm

why don't you test the correlation of the various currency contracts denominated in dollars against the contracts for the hard goods and see if it proves out?

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