Today, let’s review the impact of the December US$ strength on various commodity markets. The results may surprise. Typically, US$ strength leads to lower commodity prices. If a real change in trend has commenced for the US$ then we can expect to see Gold & Oil prices, Copper prices and the CRB index as a whole heading lower. 

So, in the immortal words of Warner Wolf, “lets go to the video tape” :

Oil prices in December are UP! How long do you think Gold prices remain below $1200 while the rest of the commodity space moves higher?

Copper Prices in December are UP!

 

The CRB index in December is UP!

 

Gold prices in December are DOWN?!?!

 

How long do you think Gold prices remain below $1200 while the rest of the commodity space moves higher?

Evidence continues to mount supporting the theory that December’s US$ rally is a counter trend move not a new trend beginning.  In fact, with stories such as…

Fannie Mae, Freddie Mac proving too big to shrink                                                                                                                                                                    

 WASHINGTON (AP) — The government’s Christmas Eve pledge of unlimited financial aid to mortgage giants Fannie Mae and Freddie Mac is aimed at making sure the housing market doesn’t take another turn for the worse and cause the economic recovery to unravel. Read More…

…It would appear government spending and, no doubt, Quantitative Easing, will continue unabated in 2010 making a sustained rally in the US$ somewhat problematic.

HAPPY NEW YEAR!!! See you all in 2010!!!