Weak U.S. Dollar Index Lifts the Metals
This morning, many of the leading base, industrial, and precious metals are catching a bid higher on the back of a weaker U.S. Dollar Index. Around 10:00 AM EST, the U.S. Dollar Index plunged lower on the trading session. The catalyst for the weaker U.S. Dollar Index was due to the ISM (Institute for Supply Management Index) news that was released. The ISM reading was 49.0 percent in May from 50.7% in April. This news makes investors confident that the Federal Reserve will continue its current quantitative easing program. Currently, the Federal Reserve buys $85 billion a month worth or mortgage backed securities (MBS) and U.S. Treasuries.
Some leading metal related equities that are trading higher on the back of the weaker U.S. Dollar Index include iPath DJ-UBS Copper TR Sub-Index ETN (NYSEARCA:JJC), BHP Billiton Limited (NYSE:BHP), SPDR Gold Shares (NYSEARCA:GLD), and Silver Wheaton Corp. (NYSE:SLW). Remember, the stronger U.S. Dollar has certainly hurt all of the leading base, and precious metal equities. Any intra-day strength in the U.S. Dollar Index could cause a pullback in the leading metal equities. The U.S. Dollar affects almost everything in the market.