A firmer US dollar is reshaping commodity markets, acting as a direct headwind for dollar-denominated assets from gold to crude.
The dollar channel
When the dollar strengthens, commodities priced in dollars become more expensive for holders of other currencies, typically weighing on demand and prices. That dynamic has contributed to the recent consolidation in metals.
Crosscurrents
Traders are balancing the stronger dollar against persistent geopolitical risk and central-bank buying, which support metals. The result is a choppy, range-bound market as competing forces play out.
Source: Business Upturn (MCX commodities).