Expect to see commodities rise because the dollar will keep falling, analysts say Natasha Turak
Published 12:28 PM ET Wed, 31 Jan 2018 Updated 2:17 PM ET Wed, 31 Jan 2018
There's good news ahead for commodities, with a particular bet on metals, as the outlook for the dollar looks to stay grim, according to experts. DoubleLine Capital CEO Jeffrey Gundlach made a call for commodities on a webcast Tuesday, during which he predicted commodities would soon outperform stocks. This correlates with the weakness of the dollar, which in the last week hit its lowest levels in more than three years. "Usually when you get a bad year in the dollar, it's followed by one or two more bad years," Gundlach said. Analysts speaking to CNBC agreed, noting that the euro's strength and broad-based global growth will also buoy commodities through 2018. "It's absolutely true that even though in the course of 2017 the correlation between oil commodities generally, and the dollar, has weakened, it is still a very very big driver. And the causality really goes from the dollar, to commodity prices," said Sabine Schels, head of fundamental commodities research at Bank of America Merrill Lynch. FUTURES AND OPTIONS TRADING INVOLVE SIGNIFICANT RISK OF LOSS AND MAY NOT BE SUITABLE FOR EVERYONE. OPTIONS, CASH AND FUTURES MARKETS ARE SEPARATE AND DISTINCT AND DO NOT NECESSARILY RESPOND IN THE SAME WAY TO SIMILAR MARKETS STIMULUS. A MOVEMENT IN THE CASH MARKET WOULD NOT NECESSARILY MOVE IN TANDEM WITH THE RELATED FUTURES & OPTIONS CONTRACT BEING OFFERED. SEASONAL DEMAND AND CURRENT NEWS IN COMMODITIES ARE ALREADY REFLECTED IN THE PRICE OF THE UNDERLYING FUTURES.