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A rising U.S. dollar is exerting major pressure on commodity prices and in turn could be setting up a prime buying opportunity in grains, energy and—yes—even gold.
Market pros expect the near-term direction for oil, metals and other items in the space to be downward as investors flock to the safety of fixed income and simultaneously drive up the greenback's value.
The dollar , as measured against a basket of its global peers, hasn't seen these levels in nearly two years as buyers run from the turmoil of Europe's sovereign debt crisis .
While there appears to be little ahead to change the momentum that has hammered risk assets — commodities among the rest — the trade is bound to get overdone.
"People are really making a mistake in looking at this cycle and saying this is just another total blowout and the commodity prices are going to get endlessly crushed," says Richard Hastings, macro and consumer strategist at Global Hunter Securities in Costa Mesa, Calif. "We really don't see that as being the case."
Oil prices are primarily on Hastings' radar screen.
U.S. light, sweet crude has gotten pummeled in the wave of global growth concerns, falling more than 18 percent in May alone and taking some of the pressure off consumers who have suffered at the gas pump. Regular gasoline has slipped 18 cents a gallon during the crude slide.
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