The business cycle has a strong impact on commodities.
Slower growth in business activity reduces demand for goods. Producers reduce demand for raw materials because they have to produce fewer products. The outcome is stable or lower raw material prices.
Raw industrial commodities have been weak since February in response of slow economic growth (see above graph, click to enlarge).
Commodities seem to be behaving like in all previous business cycles.
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George Dagnino, PhD
Editor, The Peter Dag Portfolio
Since 1977
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