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Why the Gold Bugs Got it All Wrong
The correction in the commodities bubble continues to be driven by weak economic growth. Similar to other assets traded on an open market exchange, commodities pricing is determined primarily by supply-demand characteristics.
Although commodities pricing is primarily a reflection of demand for raw materials required for economic growth, other variables influence price dynamics, such as inventory levels and everything that might alter inventories, such as weather conditions, or in the case of crude oil, geopolitical events.