Can someone explain to me this index in relation to the prices of commodities, particularly gold and silver?
It's corelation with commodities mainly lies in the fact that when there is a strong demand for drybulk commodities, such as grains, coal and Iron ore there is a corresponding demand for a means to transport those commodities purchased. As this index is made up of a combination of the freight rates fixed on a number of common trading routes around the world it should provide some correlation to the underlying demand for bulk commodities, but also has the added factor of the the supply and demand for ships combined with the relatively long and lagging response time it takes to book building yards and actually build ships. There would be no correlation with the price of gold or silver as these are not transported by bulk carriers , due to their high worth and relatively low physical volume.