#forexbreakfast focus commodity 29 June 2020
The Bloomberg Commodity index fell again (-2.1%), mainly due to the strong fall in the energy sector driven by the weakness of oil and natural gas.
Concerns about the United States weigh on the market, in some states even if partial containment measures have been reinstated. In the oil sector, inventories are rising again, and production is bouncing. The biggest drop in the energy sector concerns natural gas, which has fallen to 25-year lows, with a drop of 11%. To weigh on this figure there are high stocks and fears for the demand that could return to decrease given the increases in infections. European gas also fell (-9.1%).
The decline also for the agricultural sector (-2.8%). Corn and sugar are driving the drop, being used in the production of ethanol they are sensitive to the trend of oil.
On the other hand, the industrial index rose slightly (+ 0.4%). Copper increased (+1.9) due to fears regarding the supply of Chile as the world’s leading producer.
The best sector of the week was the precious sector (+ 1.4%); thanks to the towing of gold.
Throughout the week, prices traded above $ 40 / b. On the upside, the levels to be monitored are 45.2 $ / b and 43.93 $ / b. While at the levels to be monitored are 39.2 and 36.4 lower.
Decisive week for the yellow metal that is going to break the situation that had formed in recent months, rising above 1775 and closing Friday above that threshold. The situation is overbought, which is not unusual when there are breakages of this type. The next sessions will be fundamental to understand which direction prices will take. The resistance level to be monitored is set at 1800/1815; if exceeded, the 1900 threshold would not be unlikely.
He does not stop his run and continues to violate the resistances he faces. Beyond the 5860 thresholds and arriving in the 6000 area. The metal is overbought, but the trend is rather strong.
The situation becomes more complicated, however, the bearish trendline that connects the 2018 high with the 2020 one passes around 6000. The trendline that connects the 2019 high with the 2020 one passes around 6185. Finally, at 6293 there is a further static resistance.
Therefore, it is probable that a maximum of 6000 to 6300 may form; traders would have an incentive to take profit as it is difficult to imagine a rise in price beyond the 6300 thresholds.