There was fairly downbeat sentiment surrounding commodities and commodity-linked stocks yesterday. The Bloomberg Commodity index hit its lowest level in 16 years, and is close to setting an all-time low since its launch in 1991.
Not surprisingly, the dollar’s strength (up 1.93 percent yesterday and 9.66 percent year-to-date) in the wake of the Fed liftoff yesterday has been getting a lot of attention.
Some investors thought that the increase in rates could actually provide a reprieve for commodities given that the dollar has typically fallen in the six months following the first hike in a tightening cycle.
Gold dropped -2.40 percent and is now -12.99 percent for the year. Other precious metals are down, on average, -15.24 percent for the year.