#forexbreakfast focus commodity
The positive streak of the Bloomberg commodity index has come to an end. After 6 uninterrupted weeks to the upside, profit-taking came. The index closed the week with a -1%.
The only sector that closed positively was the agricultural one. Mainly driven by purchases of Arabica coffee + 6.1% and soy + 1.8%. Soybeans hit a two-year high thanks to speculation about more Chinese purchases. Speculation because there are concrete risks of damage to crops due to the passage of typhoons.
In contrast to what one would expect, precious metals also closed negative -2.5%. Despite the tensions in the markets. Mainly due to the appreciation of the dollar.
The only metal to close positively was palladium. Thanks to the increase in car sales in China and thanks to the statements of Impala Platinum Holdings that it expects metal shortages for 2020.
The energy sector was also negative -3%. Sharp drop for oil caused by demand concerns and signs of a slowdown from China.
Non-ferrous Industrial metals close without noteworthy variations. The index was supported by the rise in copper + 1.4% which benefited from low inventories and high Chinese demand.
Finally, iron closed up + 5%, also benefiting from high Chinese demand.
Oil volatility increases. Black gold broke the support at 44.09 and points to the next support at 41.38. The next support is located in area 37.85.
After last week’s decline, gold remains firmly in the previously reported trading range, ie below 2000 but above 1900. Currently, it does not seem to have a precise direction but the daily indicator marks an overbought situation.
The boundaries of the range must be monitored. A close above 2000 could mean a resumption of the bullish movement. While a close below 1900 could bring the prices down.
Copper has been at its peak for over two years. Last week it crossed the 6712 marks.
The trend seems to continue and point to the 7020 area. In the event of a return to 6380, it could indicate a trend reversal.