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Gold, silver, copper, oil and different commodities all appear overvalued in technical phrases and will fall 13% or extra from right here, Credit score Suisse’s charting crew says.
“Commodities have confirmed a small ‘head-and-shoulders’ prime, and we flip bearish on the asset class,” Credit score Suisse technical analysts let by Managing Director David Sneddon wrote in a brand new word. “We see sufficient technical proof to alter commodities as an asset class to unfavourable on a three- to six-month funding horizon.”
The analysts argued that:
Oil Might Drop Practically 30%
Credit score Suisse’s technicians see petroleum (CL1:COM)(CO1:COM)(NYSEARCA:USO) as dealing with the most important potential decline, with Brent crude probably falling to as little as $63.02 a barrel – a 28.9% drop from Thursday’s $88.66 degree.
“Brent crude oil has now clearly damaged under the essential $92.09/90 assist space – the 38.2% retracement of the 2020/2022 upmove – and we anticipate additional weak point towards the 50% retracement at $77.56,” the analysts wrote.
They added that if Brent (CO1:COM) breaks the $77.56 assist degree, the commodity would subsequent check its December 2021 low of $65.72.
A break under that might ship Brent (CO1:COM) all the way in which right down to $63.02 – a 61.8% retracement of its 2020-2022 positive aspects “the place we might anticipate a extra sustainable consolidation/countermove to be established,” the consultants wrote.
Silver Is Poised for a Potential 17% Decline
Credit score Suisse’s chartists see the current failure of silver (NYSEARCA:SLV) to prime resistance at $21.39 an oz. as pointing to a pullback towards a $15.56 assist degree. That will signify a couple of 17% decline from the steel’s Thursday $18.71 pricing.
“Above $21.39 stays wanted to negate the highest,” the analysts wrote.
Copper Might Shed 15.5%
The technicians mentioned that with copper (HG1:COM) at present buying and selling under its 55-day common, “the commercial steel stays in a well-defined technical downtrend. With a big prime nonetheless in place and the market under falling long-term shifting averages, we keep biased in the direction of additional weak point.”
Copper (HG1:COM) traded at $7,422 per metric ton Thursday in London, however Credit score Suisse’s chartists wrote {that a} break under $6,844 might take the steel down as little as a technical-support degree at $6,300/$6,269.
Gold Might Fall Practically 14%
Credit score Suisse wrote that since gold (XAUUSD:CUR)(NYSEARCA:GLD) has already confirmed a serious “double prime,” the steel might fall to as little as $1,440 per ounce. That’d signify a 13.7% decline from Thursday’s $1,668.60.
“We anticipate additional weak point at $1,600, then $1,560 and ultimately [at gold’s March 2020 low of] $1,451/40,” the analysts wrote. “Solely a convincing break above the 55-day common at $1,725 would ease the strain on the dear steel.”
For the entire day’s commodities information, click on right here.
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