Long-term currency cycles is lending strength to the US dollar which in turn is pushing prices of Brent crude oil. The dollar’s 8 year cycle is due to top in 2016 and, as such, further declines in the oil price are to be expected. The longer-term target stands at 70.698.
Commodities & Energy
Although the short-and medium term outlooks remains neutral for gold, a test of 1260.4 on the monthly chart looks increasingly likely, says Clive Lambert at FuturesTechs. Should this happen, 1179.4 would be the target. On the upside, 1300-1302.4 needs to be broken for further gains.
The Bloomberg Industrial Metals Index has lagged the BBG Commodity TR Index since 2010 but has now broken out from its relative strength trend, says Riccardo Ronco at Aviate Global. Added to a break of its 50 & 200 day MA’s, this will be a significant bullish signal if July’s highs are breached.
A triangle breakout will bring a downward move to $1100 for gold before a countertrend rally is seen, says Tarun Dang at Trendwise. A decline will also form a 5th wave of an Elliott Wave pattern thereby reinforcing the conviction of a possible downward break.
The long-term downtrend in the Gold Miners ETF price ended this year but a genuine reversal in price has yet to be confirmed, says Andy Dodd at Louis Capital Markets. A breaking of the neckline of a head-and-shoulders reversal is required first. After this 35.00 is the target.
Brent crude remains in a long-term consolidation pattern with declining highs putting the balance of risks on the downside, says Maxime Viemont’s team at BNP Paribas. Meanwhile, gold looks set to test its 12 year trendline a break of which would pave the way for a significant downward correction. He also discusses stocks, bonds and FX.
Brent oil is in a continued and complex consolidation phase, says Maxine Viemont’s team at BNP Paribas. Risks are mainly on the downside with medium term targets at 96.75-88.50. With a succession of lower highs, a break below 106.85 would signal a more significant downward move.
The Dow Jones/UBS Commodity Index bubble burst in 2008, and has been on a corrective downward trend since 2011, notwithstanding a short-term rally this year.
Most commodities will suffer a bearish second quarter according to Wang Tao, technical analyst at Reuters Singapore. Included in this outlook is gold, metals and grains which are expected either to resume a downward trend or complete recent rebounds.
The short-term outlook for gold remains bullish with a rebound from the recent bearish leg targeting 1361 and then possibly 1434, says Maxime Veimont at BNP Paribas.