What are the factors affecting commodity prices?

There are several factors that can affect commodity prices, including:

1. Supply and demand: The basic law of supply and demand is one of the most important factors affecting commodity prices. When the supply of a commodity is higher than demand, the price of that commodity tends to fall. Conversely, when demand for a commodity is higher than its supply, the price tends to rise.

2. Geopolitical events: Geopolitical events, such as wars, sanctions, and political instability in major producing or consuming countries, can have a significant impact on commodity prices.

3. Weather: Weather conditions can affect the supply of many commodities, such as agricultural products and energy products. For example, droughts or floods can impact crop yields, while hurricanes or storms can disrupt oil and gas production and transportation.

4. Currency fluctuations: Commodity prices are often denominated in US dollars, so fluctuations in currency exchange rates can impact commodity prices. A stronger US dollar can lead to lower commodity prices, while a weaker US dollar can lead to higher commodity prices.

5. Global economic growth: Commodity prices can also be affected by global economic growth. When the global economy is growing, demand for commodities tends to rise, leading to higher prices. Conversely, when the global economy is in a recession, demand for commodities tends to fall, leading to lower prices.

6. Technological advancements: Technological advancements can also impact commodity prices. For example, the development of new technologies for extracting oil and gas can increase the supply of these commodities, leading to lower prices. Similarly, new technologies for increasing crop yields can increase the supply of agricultural products, also leading to lower prices.