[Premium] Commodities Update

Gold's move to the upside has accelerated since breaking out above 32,400 two months ago, meeting our first upside objective near 37,550 very quickly. This new structural trend is strong and suggests we need to be buying any weakness with a secondary long-term target near 45,350.

Click on chart to enlarge view.

Here's the daily chart showing a more tactical view of Gold. Prices have rallied 13% since August began and is now meeting our secondary price objective near 38,650. We don't want to be chasing this move, but any weakness back down towards 35,000 should be bought as the new long-term trend is clearly higher.

Silver looks similar, breaking out above a confluence of resistance and accelerating to the upside. As long as prices are above 40,500, we want to be buying any weakness and taking profits up near 48,500.

Tactically the pictures a bit messier. Prices are up big and met our first target near 43,400, so we want to wait for prices to consolidate before getting involved again. If prices can consolidate above 43,400 and then continue higher, we can be buying that breakout. For now though, a pause is likely needed for the reward/risk to become more favorable.

Base Metals have been an absolute disaster, but Nickel continues to show relative strength as prices break above 1,050 and momentum gets back into overbought territory. This looks like a structural breakout that targets its former highs near 1,315.

From a more tactical perspective, if prices can stay above 1,050 then this base breakout looks to target 1,255 on the upside over the next 1-3 months. While some consolidation would be healthy, we only want to be long above 1,050, as below that our thesis is invalidated and the risk shifts to the downside.

Cardamom has been an absolute monster since breaking out earlier this year. With that said, its bearish momentum divergence continues to build as we meet our third upside price target near 4,100. At current levels the reward/risk on the long side is not what it once was, so we're taking profits and waiting to see how this potential correction plays out.

Crude Oil looks weak and a test of the 2019 lows looks likely. If prices fail at that level, then our next downside target is the 2018 lows of 3,100.

Our two ideas outlined in Mentha Oil and Crude Palm Oil continue to work, but other than that the other Commodities we track remain messy and not attractive from a reward/risk perspective.

For now, Precious Metals and Nickel are the names of the game. Let's see if the other Base Metals and/or the entire Commodities space can catch a bid as well on the back of this Rupee weakness.

Thanks for reading and please let us know if you have any questions.

Allstarcharts Team