The slide in commodity prices today following the release of an apparently strong US Employment Report underlines their sensitivity to expectations of further monetary support. As it happens, the pace of improvement in the US labour market is still painfully slow, so it is far too soon to speculate about an early end to QE3. Gold at least should also still benefit from a renewed escalation of the crisis in the euro-zone. Nonetheless, commodity markets are probably right to be thinking that they cannot rely both on a strong economic recovery in the US and unlimited largesse from the Fed.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services