Low interest rates and a weak dollar will keep commodities strong

www.tradingfloor.com
Trading Floor editor Andrew Arnold speaks to Saxo Bank's Ole S Hansen, senior manager in futures and fixed income, about the week in commodities so far. Big US budget deficits will continue to put pressure on the dollar and thereby aiding the commodity rally which has been under way for the past 6 months. Oil together with Gold and other commodities have become financial asset as investors seeks a safe haven from continued dollar depreciation. Short term weak demand fundamentals have kept the spot price from rallying further with storage running at seasonal high levels helped by milder weather.
Longer term however the outlook for a weaker dollar, an expected economic rebound and potential geopolitical risk in Iran will support prices. Emerging economies will pick whatever lack of demand that exists in developed economies.

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News & Politics

Tags:

• commodities
• trading
• dollar weakness
• crude oil
• gold