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Commodities struggle as dollar dominates

Losers again outweighed winners this week. Oil dropped in anticipation of the easing of sanctions on Iran, although the near-term prospects for prices may depend more on sentiment towards China and the dollar. Wheat fell on more favourable weather conditions in the US, while gold suffered from further strength in the US currency despite the announcement of a large increase in China’s official holdings. Silver again underperformed gold, as is usual when the prices of both are falling. Base metals had a slightly better week, helped by stabilisation in China’s equity market.

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