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#forexbreakfast – Commodities 14/03/2022

INTRODUCTION

In a context of extreme volatility, the Bloomberg Commodity Index (-0.5 percent) ended its positive streak of consecutive weekly gains last week. The most striking example was nickel (+63%), which experienced an all-time high of more than 100,000$/t, forcing the LME to suspend Tuesday exchanges (which are still suspended) due to order cancellation.

War-sensitive currencies, such as the ruble, Nordic currencies, and Eastern European currencies, remain the most volatile. For the latter, the week was ultimately positive, and the recovery is continuing today.

BRENT

Very high volatility for Brent, which reached 140$/b at the start of the week due to the lack of progress from the previous weekend’s negotiations, and then deflated later due to a combination of factors. From a technical point of view, Brent still remains within a strong uptrend even though there continue to be negative divergences in the stochastic daily and weekly.

Source:https://www.tradingview.com/chart/?symbol=CURRENCYCOM%3AOIL_BRENT

COPPER

Prices reached a new all-time high of 10845$/t at the start of the week, due to initial concerns about supply constraints caused by the conflict. Following that, prices retraced to below $10,000/t due to the continuation of negotiations in search of a truce and the reduction of energy prices that impact on the cost of production. The rise in the number of infections in China has also played a significant role, as it may result in lower Chinese demand in the short term.

GOLD

Last Monday, gold hit a 2020 all-time high (around $2075), pushing as high as 2070$/o on the spot price, as markets opened in full panic after the first truce talks failed. As the talks progressed, the price movement subsided. Technically, the prices are close to the short-term bullish trendline passing through 1950$/o.

Source: https://www.tradingview.com/chart/?symbol=CURRENCYCOM%3AGOLD

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