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Commodities Under Selling Pressure Ahead of Weekend

May 22, 2015 at 18:43 by Vladimir Vyun

Commodities were under selling pressure today after the US inflation data and the speech of Janet Yellen, Chairwomen of the Federal Reserve, that were followed by a strong rally of the dollar. The sell-off hit all the markets, be it metal, energy of agricultural.

The Consumer Price Index rose 0.1 percent in April, a bit slower than the 0.2 percent growth in the previous month. Yet excluding the volatile components like food and energy, the indicator rose 0.3 percent, surpassing the March’s increase. The mixed data clouded the outlook for timing of the potential interest rate hike from the Fed.

Talking about interest rates, Chairperson Yellen said that a rate lift-off later this year is probable:

If the economy continues to improve as I expect, I think it will be appropriate at some point this year to take the initial step to raise the federal funds rate target and begin the process of normalizing monetary policy. To support taking this step, however, I will need to see continued improvement in labor market conditions, and I will need to be reasonably confident that inflation will move back to 2 percent over the medium term.

Yet she reiterated that “the pace of normalization is likely to be gradual” and reemphasized that “policy will be determined by incoming data and what that reveals about the economy.”

Trading should be quieter than usual at the start of the next week as US markets will be closed for Memorial Day.

June futures for gold ticked down 0.11 percent to $1,202.80 per troy ounce as of 18:35 GMT on COMEX today. July copper lost 1.39 percent to $2.809 per pound. WTI crude oil declined 1.48 percent to $59.82 per barrel on NYMEX. Contract for Brent crude went down 1.4 percent to $65.61 per barrel on ICE. Corn fell 1.1 percent to $3.61 per bushel on CBoT. Futures for wheat dipped 1.39 percent to $5.1475 per bushel. Soybeans declined 1.23 percent to $9.27 percent.

If you have any questions and comments on the commodities today, use the form below to reply.

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