Why are Commodity Prices Falling During QE3?

That’s a genuine question.  I wish I had some explanation, but unfortunately the chart below has me scratching my head.  After four years of closely following the monetary base, commodity prices have diverged since the start of QE3.  The S&P has rallied (true to past QEs), but gold and oil have each fallen as the monetary base has expanded.

If the Fed is driving this $SPX rally by tacitly devaluing the dollar, then shouldn’t commodity prices be rising as well?  Alternatively, perhaps the rally is being driven by genuine economic strength.  In that case one might argue that commodity prices are falling because the dollar is strengthening on an absolute basis.  However, if that’s the case then why aren’t cyclical companies leading the equity rally?  And shouldn’t commodities be catching some sort of “improving economy” bid?  Are commodities seeing something that the equities aren’t? Like the end of QE4Good?

Commodities and the Monetary Base

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