Commodity Prices Reach Rally Inflection Point

www.investing.com/analysis/commodity-prices-reach-rally-inflection-point-200573921

By Chris Kimble | Apr 19, 2021 11:19AM ET

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Long-Term Thomson Reuters Core Commodity Index Chart.

Commodities have been the talk of the town over the past several months, with grains, energy and metals reaching new multi-month highs over the 12 months.

And this has lead to concerns over input costs – and inflation.

That’s where today’s chart comes into play. It is a 25+ year “quarterly” chart of the Thomson Reuters Core Commodity Index.

As you can see, commodities have been in a broad downtrend channel since peaking in 2007-2008. As well, the 25-year stretch has produced an important support/resistance pivot line (marked by red and green arrows).

So why does this matter to the commodity index and several select commodities showing strength?

Because the current five-quarter rally in commodities is testing this important pivot (now resistance). And at the same time, it is testing the top of its 13-year falling price channel at (1).

If resistance holds, inflation may be held in check and bonds may experience a bear market rally. But if commodities breakout, then inflation concerns will continue to rise, and select commodities showing relative strength will continue higher. Stay tuned.

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Comments (2)

Steve Siew Apr 19, 2021 9:34PM ET

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Deflationary spiral - no inflation

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Mr Doodl Apr 19, 2021 12:23PM ET

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The two resistance lines, one coming from 90s, are unlikely to break by commodities, since inflation concerns are also easing.

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Central Banks

Interest Rates

Next Meeting

FED

1.00%

Jun 15, 2022

ECB

0.00%

Jun 09, 2022

BOE

1.00%

Jun 16, 2022

SNB

-0.75%

Jun 16, 2022

RBA

0.35%

Jun 07, 2022

BOC

1.00%

Jun 01, 2022

RBNZ

2.00%

Jul 13, 2022

BOJ

-0.10%

Jun 17, 2022

CBR

11.00%

Jun 10, 2022

RBI

4.00%

Jun 08, 2022

PBOC

3.70%

BCB

12.75%

Jun 15, 2022

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Crude Oil WTI	111.02	+0.69	+0.63%
Brent Oil	111.44	+0.32	+0.29%
Natural Gas	9.168	+0.175	+1.95%
Gold	1,844.40	-1.90	-0.10%
Silver	21.840	-0.030	-0.14%
Copper	4.2470	-0.0075	-0.18%
US Soybeans	1,675.38	-4.62	-0.27%

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Direxion Daily Junior Gold Miners Bull 2X Shares	53.34	-0.99	-1.82%
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Commodity Prices Reach Rally Inflection Point

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