The subject of inflation is one that makes headlines on a regular basis, but in many cases, how the traders and the investors follow its clues is much more than announcements made by the central banks or government figures. Clues as to whether the banks are succeeding are more direct and usually more telling, and they are provided by the commodities market. When oil, metals, grains and even livestock prices move in one direction, their inflationary pressures are usually expressed prior to the official statistics reflecting this phenomenon. To global economic spectators, commodities are like early messengers.
When an energy price starts rising exponentially or agricultural products skyrocket because of the supply chain bottlenecks, the repercussions tend to spread across the industries. All are affected in some way such as transportation, manufacturing and consumer products. Through monitoring commodities in different segments, the traders can have a feel of how inflation can develop in the region or the world. Instead of waiting with slow economic figures, people prefer the timeliness of the market indicators.
There are however commodities that do not move in isolation. Copper often signals increased activity in industries in China. An outbreak in wheat may be caused by geopolitical tensions or climate conditions in large producing areas. It is not possible to make sense of these movements by reading numbers alone, it will involve visualizing the movements, putting them in context and comparing them with others. This is where TradingView charts become one of the key components of the procedure of various market participants.
With TradingView charts, traders can automatically look at a number of commodities simultaneously, placing various contracts on the same screen or comparing them across different timeframes. When someone follows crude oil and natural gas, it is easy to compare their momentum side by side, to determine whether there is possible inflation of the energy kind brewing. They are also able to notice the relation between commodities and currencies and the fact that firstly the higher markets set the prices of gold, may correlate with changes in expectations of inflation depending on the policies of the central banks.
The platform also provides traders the ability to lay macroeconomic indicators over price movements and thus enabling them to see to what degree the commodity trends tend to be in line or out of line with the inflation indexes. One can consider an instance like the scenario where industrial metals keep rising, and the Consumer Price Index plateaus, then, perhaps more attention should be paid to a possible inflation in the future, that is not reflected on the larger market.
There is another supportive aspect, custom alerts. Traders have an option of setting alerts on a particular commodity hitting a critical mark or increasing or decreasing by a percentage within a specified period. This is especially useful in the situation whereby a trader is maintaining a watchlist of inflation-sensitive assets. Regardless of what they may be tracking, be it lumber, soybeans, or palladium, it becomes much easier to stay on top of the game when an alert is perfectly timed and not a single important inflation signal can be missed. And highly changeable markets can significantly affect outcomes.
Since inflation tends to vary between the developed and developing economies, it will be a good practice to compare products alongside the effect they have regionally. This could be compared with the coffee price spikes that could be experienced in Latin America compared to the effects in Europe. Similarly, fluctuations in the prices of iron ore could be an indication of the presence of different demand patterns in Australia and Southeast Asia. TradingView charts enable users to look into those patterns by zooming in and out, changing perspective with a few clicks of the mouse.
Commodities are among the most sincere efforts one can make in a world where inflation fears might trigger mild concern among currencies, a change in interest rate expectations and an equity market shift. They are more immune to revisions and more bound to the law of supply and demand. With the help of such tools as TradingView charts to help interpret those movements, traders can be one step ahead of the game not only because they can finally see the effects of inflation when it happens but also see where it might head the next time.
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