Commodities Suffer at Hands of Fed

Commodities dropped to the lowest level in more than five years after the Federal Reserve raised its outlook for interest rates, bolstering the dollar and reducing the appeal of raw materials as a store of value.

The Bloomberg Commodity Index of 22 futures dropped as much as 1.3 percent to 120.4562, the lowest level since July 2009, and was last at 120.4843. The gauge has lost 4.2 percent in 2014 and is set for a fourth year of declines. Diesel decreased to a two-year low, while gold slipped to the lowest level since January. Wheat fell to the least since 2010 on the outlook for growing global output.

Commodity markets dropped and the dollar gained after Fed officials signaled yesterday they won’t be raising interest rates anytime soon while suggesting they would tighten credit at a faster pace once the liftoff has begun. The Bloomberg Dollar Index surged to a 14-month high yesterday.

Bloomberg

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.