A strong dollar fuels the decline in commodity markets

The bullish push in commodity prices is meeting strong resistance from a surging US dollar.

Prices for oil, metals and agricultural products have fallen since early June after surging following the Russian invasion of Ukraine. In part, the recent drop reflects investor fears that a demand-destroying recession is imminent. But it’s also because most commodities are denominated in dollars. That means a rising dollar makes them more expensive for buyers around the world and dampens demand.