However, the sudden surge in the greenback reversed sentiment in the commodities space – a stronger dollar weighs on commodity prices since the market is priced in the USD, which makes it more expensive for foreign buyers when the dollar appreciates.

Additionally, many observers argued that the recovery in commodities would only be short-term since supplies remain robust and demand is still soft in weaker economies across Europe and Asia.

Some also point out that data from China have fueled concerns about demand for commodities. For instance, the average price of new homes in 70 Chinese cities declined for an eight month in a row – construction and sale of new homes are used as a gauge of economic well-being and commodities demand.

“We have come to a pause in the commodities rally,” George Gero, a senior vice president with RBC Capital Markets Global Futures, said in the WSJ article. “Some people are taking the opportunity now to lock in profits.”

For more information on the commodities space, visit our commodity ETFs category.

Max Chen contributed to this article.

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