Commodities continue to see upside in first week of Q2 2024

The US dollar is moving higher after March's jobs data released Friday morning. Positive price action is reverberating across the commodity sector, notably cocoa futures (CC=F) and precious metals like gold (GC=F).

Yahoo Finance Senior Markets Reporter Jared Blikre reviews the upsides seen across commodities in the first trading week of 2024's second quarter.

For more expert insight and the latest market action, click here to watch this full episode of Morning Brief.

Editor's note: This article was written by Luke Carberry Mogan.

Video transcript

SEANA SMITH: Let's get to the rest of the market action, including the commodity space and some of the movement that we're seeing there. Jared Blikre is standing by with that. Jared.

JARED BLIKRE: Thank you, Seana. Let's take a look at the US dollar index. First, I'm going to put this up on the Wi-Fi interactive behind me. And this is what's happening this-- over the last five days. Now we have seen a little bit of a rise over the last two days, but let me put some context to this. We've had basically a double top this year. And the higher the dollar, the more that weighs on commodities and risk markets overall.

So you can see we're in kind of a precarious position here if we head higher because of the higher for longer mantra that the Fed, that whole narrative plays out well. That has important implications for everything. It could weigh on commodities. But here we have what's happening today. Wheat actually is the biggest gainer overnight, up 2%. Palladium, biggest loser, down about 4%.

But I want to check out what's happened over the last five days. I think this is instructive. Commodities tend to mean revert over the time, but they can trend over shorter periods of time. And right now, we are in a commodities rally for a lot of these different markets. So we have lean hogs. We have coffee up 8%. We have silver up 7% this week.

And just let's take a look at the one-year silver futures. They've been stuck in a holding pattern here but have recently broken to the upside, and that's a very similar situation that we have for gold. Gold is up 3.5% this week. It's coming off a record high only yesterday.

And right now, let's check out the overnight price action. Pretty interesting. We took a little bit of a dip after the payroll report, but we are now back above the highs before us. That just shows you the strength that is embedded in this market. We do have cocoa futures. I want to highlight those because those have backed off recent highs but still very, very volatile. Bottom line is commodities are trending now and mostly to the upside.