Commodity prices were lower today after investors took in profits after a persistent and robust rally since the onset of Middle East unrest. A combination of US dollar weakness, increased commodity prices, and a stubbornly high unemployment rate has cast some doubt among for some investors. Is the rally sustainable, or this strong bull market simply the result of Federal Reserve currency manipulations? Economists are concerned about a burgeoning debt that will result in stagflation. Despite the fear of an increasingly more conspicuous inflationary effect on the dollar, Ben Bernake and his team have no plans to increase interest rates. In fact, the Fed is planning on buying more government bonds.
With European countries taking a more cautious approach towards inflationary pressures, the Robot Forex team expects the dollar to continue weakening over time. Additionally, we believe that commodity prices will continue to rise over the long-term, but expect a short-term correction, especially if stability returns to oil-rich Middle Eastern countries.