Commodities currently on DBC’s roster include West Texas Intermediate oil, Brent crude, gasoline, gold, silver, wheat, soybeans, corn, natural gas, sugar, aluminum, zinc and copper.

“Ultimately, the direction of the dollar remains a key question for many of these commodities,” according to CNBC. “This is because the dollar is the benchmark for pricing and buying commodities, so a weak dollar means it costs more dollars to buy commodities and a lesser amount of the currencies of the resource-producing countries. Conversely, a strong dollar often decreases the dollar price of commodities.”

Gold has enjoyed greater demand in a low interest-rate environment as the hard asset becomes more attractive to investors compared to yield-bearing assets. However, traders lose interest in gold when rates rise since the bullion does not produce a yield. Interest rates remain low in many developed markets and some emerging markets have been rapidly lowering borrowing costs.

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

Subscribe to our free daily newsletters!
Please enter your email address to subscribe to ETF Trends' newsletters featuring latest news and educational events.