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Here's Why Commodity Prices May Decline Even Further

ByChris Kimble
Published 02/17/2023, 04:47 PM
Updated 07/09/2023, 06:31 AM

Commodity prices have skyrocketed over the past few years, but today we put the move higher into perspective.

And we do this by looking at a long-term monthly chart of the Thomson Reuters Equal Weight Commodity Index.

Equal Weight Commodity Index Monthly Chart

As you can see, commodities have been trading within a wide, falling price channel. The big rally from 2020 to 2022 saw the Equal Weight Commodity Index go from the bottom of the channel to the top at (1). That top was also marked by the 61.8% Fibonacci retracement.

Commodities have now declined nearly 20% from roughly one year ago and are testing important near-term price support at (2). If this index breaks below support here, it could mean a bigger decline in commodity prices is underway. Stay tuned.

Latest comments

I think on Monday expected the commodities price will be down to 1836 . if anyone analysis plz
Inflationary pressures pushing commodities higher. On the other hand, the global economy is dead and so is demand... Stagflation ahead?
china reopening, us and eu rapidly jamming money into going green infrastructure and and retooling to support the needed transmission for the new green reality, ya commodities are going down, we are still in a labor deficit so while prices are higher without a doubt the middle class and retired people a driving the economic bus and it is not slowing yet
Commodity prices goigher in inflationary environment. Not too difficult to see.
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