The copper $ paradox explained
We all know that when the $ goes up all commodities go down and when $ goes down the price of commodities goes up. That is under normal supply-demand fundamentals. But what happens when there is no demand for the metals, say copper? The draw-down of inventory from the LME, gives the impression that there is demand for the metal. But it there? Not really. The Chinese traders are hoarding the metal, to re-sell it either when the demand goes high or, and this is the puzzle, if the US dollar goes up and The Rambimi , in relation to the dollar goes down. To give an example. If when the traders buy copper and pay in $ the exchange rate of the $/R is say 6.51 Rambibi to the $, if the dollar goes up then one needs more Rembibis to buy a dollar, say 6.55. When the dollar goes up and the Rambibi goes down the traders make money if they sell copper in the market in $ and exchange the dollar with more Rambibis at 6.55 instead at 6.51 to the $ when they bought the copper thus profiting the difference of 0.04 Rambibis to the dollar. This explains the distorted market when there is no supply -demand fundamentals and the speculators can play around with currency exchanges. And so, now the Chinese traders are selling into the market thus depressing the metal. And since the Chinese traders are drawing copper from the LME in order to resell it at a profit, we notice that while the dollar is going down, so is copper because the Chines are flooding the market with the metal. That is why it's important to keep an eye on the LME to see if inventories are going up or down, and that will give an indication where the copper market is headed.