Dollar Will Be Good News For Commodities, Just Wait & See - Analyst
(Kitco News) - Although it seems like the U.S. dollar’sdeclines are slowing down, one analyst says commodity investors should not betoo concerned.
The U.S. currency, which tends to tradeinversely with commodities like gold, has been making a bit of a comebacklately -- after seeing its worse year “in history” since 2004 -- holdingsupport as some analysts calling for a bounce in prices.
However, according to BloombergIntelligence’s Mike McGlone, investors should expect “range-bound” trading forthe greenback in the “foreseeable future.”
And besides, he added, “Any stall in the dollar declineshould matter little for commodities' upward trajectory.”
The U.S. dollar index saw modest gains inearly-trading Monday. The greenback has since cooled off slightly, last seen at89.51 points. Meanwhile, after some pressure earlier in the session, goldfutures have moved higher from Friday’s slump. April Comex gold was last seenat $1,338.60 an ounce, up 0.10% on the day.
McGlone remains optimistic for commoditiesas a whole, especially in the long run as he still calls for a “peak dollar.”
“Thebigger picture for the dollar is a peak similar to 16 years ago, with bullishrepercussions for commodities,” he wrote. “Yet the pace of the buck's decline is due fora pause.”
By Sarah BenaliFor Kitco News
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sbenali@kitco.comwww.kitco.com Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.