Investors had their eyes glued to the price of oil as it went higher and higher these past weeks. But just to show how quickly things can change, oil got creamed on Wednesday – along with the rest of the commodity sector. Still, even with that one-day plunge, the 19-member Reuters/Jeffries CRB Index is still up 8.31% since the beginning of the year. Compare that to the 8.6% LOSS in the S&P 500 index. And oil is still being outperformed by most of the rest of the OTHER commodities in the Reuters/Jeffries CRB Index.
Crude oil is #11, behind #10 gold and #9 corn. The top three performing commodities this year have nothing to do with energy – cocoa, silver and aluminum.
Meanwhile, the U.S. dollar index, which compares the greenback to the world's major currencies, has fallen about 6% this year and is near its lowest levels ever. Recession fears are driving the greenback lower as jobs disappear, home prices fall and consumer confidence plummets.
That was the trend that was holding until Tuesday, when the dollar started going up, and commodities peaked.
The question facing us now -- Is this top in commodities a short-term correction, or the start of something bigger?
Here are some charts to look at while we ponder that question ...
Oil and gold often move together. Will that continue?
Labels: agriculture, crude oil, gold, silver
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