Markets are flat ahead of this holiday week, but the US Dollar continues to surge, and with it come challenges for multination corporations and commodities.  There are additional issues with respect to commodities taking it on the chin.   The larger part of the story goes back to China demand, or lack of demand.  Amazingly, the market is reacting as if those 2009 lows were the natural price levels for metals and not the result of panic-selling and a global meltdown.

China has begun to close smelters and slow production, but it’s not enough to shift momentum.  Zinc and Cooper are breaking down while iron-ore is already at lowest point since 2008.

Zinc Monthly Price - US Dollars per Metric Ton

Copper, grade A cathode Monthly Price - US Dollars per Metric Ton

The Dollar Index DXY is currently at a double top, and if it breaks out through this point, we could see a return to the all-time high.

The dollar rallying back to 2001 levels only helps American tourists (I shopped until I dropped in Paris in 2000), but there are fewer of those these days.

Let’s not force the issue this morning, but this could be an eventful week especially with a half-day trading on Friday.  Please go to website or ask your rep about our special Retail Report.