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Analysts say the Federal Reserve's 50 basis point cut will support commodities by lowering opportunity costs and supporting dollar-quoted prices. They add that fundamentals still matter more, with gold's rally already pricing in cuts and a weak Chinese economy weighing on oil.
Lower US rates weaken the dollar and can lift dollar-priced commodities, but supply and demand, especially China's demand, remain the main drivers of grain and energy prices.
businesstimes.com.sgMia PeiSep 19, 2024After 1,637 past bearish macro events, US Dollar (Broad) moved a median -0.2% over 5 sessions (39% higher; middle half -0.6% to +0.3%), and -0.2% over 20.
After 102 past neutral macro events, Crude Oil (WTI) moved a median -0.1% over 5 sessions (49% higher; middle half -3.3% to +2.5%), and +1.8% over 20.
Moves of each commodity's benchmark from the last close before the event. Historical reads pool past events of the same kind; they describe what happened, not what will. Not investment advice.
