1, the Fed's interest rate hike may be bad for dollar-denominated commodities. Raising interest rates by the Federal Reserve will increase the borrowing costs and risks of investors, reduce the willingness and demand for investment and consumption, and then affect commodity prices. The Fed's interest rate hike will increase the yield and attractiveness of US Treasury bonds and other fixed-income assets, and enable investors to transfer funds from high-risk commodity markets to low-risk fixed-income markets. Raising interest rates by the Federal Reserve will also reduce inflation expectations in the market and affect the long-term price trend of commodities.
2. It should be noted that the impact of the Fed's interest rate hike on different commodities may be different. Different commodities have different supply and demand structures, price formation mechanisms and market characteristics, which will affect their sensitivity and response to the US dollar interest rate hike. Crude oil, natural gas, coal and other energy commodities. Its price is influenced by multiple factors such as supply and demand, geopolitics and environmental policy. And energy commodities are more sensitive to the US dollar interest rate hike.
3. The prices of precious metals, nonferrous metals, ferrous metals and other metal commodities are affected by industrial demand, investment demand, inventory level and other factors. The reaction of metal commodities to the interest rate increase of the US dollar is complicated, because different metals have different uses and characteristics. For example, when the dollar appreciates and interest rates rise, precious metals such as gold and silver will fall. However, in times of market turmoil or crisis, precious metals may be supported by safe-haven demand. Non-ferrous metals and ferrous metals are mainly affected by industrial demand, and their prices may fall when economic growth slows down and interest rates rise.
4. The prices of agricultural products such as cereals and oilseeds are greatly influenced by climate and other factors. The response of agricultural products to the US dollar interest rate hike will be weaker, and the demand for agricultural products is usually relatively stable. In the case of imbalance between supply and demand or changes in market expectations, there is a greater possibility of large fluctuations.