Commodity Technicals: Gold, Silver At Critical Juncture

December 22, 2011

 

Brent crude oil is close to the middle of its range between $100/bbl and $115. Until there is a break one way or the other, the technical outlook remains neutral.

 

Brent Year-To-Date:

 

Despite the recent closing of the gap between WTI and Brent, the former is— for now— a broken benchmark. Thus, technical analysis on the WTI chart is fairly meaningless. That being said, the benchmark has been facing resistance near $102 in recent weeks.

 

WTI Year-To-Date:

 

Copper found support near $3/lb in late September and early October. It has since bounced as it takes its cues from macroeconomic developments.

 

Copper Since 2009:

 

Corn found support near $5.80/bushel last week and has since bounced. Relatively strong fundamentals have kept the grain in much better shape than soybeans and wheat, but that also introduces more downside risk. We would be wary of entering long positions in corn. A break below $5.80 exposes much lower levels near $5 and below.

 

Corn Since 2009:

 

Soybeans have been on a downtrend trend since breaking key support at $13/bushel back in September. It bounced off the $11 level last week, but the downtrend remains intact.

 

Soybeans Since 2009:

 

Wheat has been buoyed by strength in corn as the two serve as substitutes in the livestock feed market. However, there is nothing compelling about the current technical setup and given bearish fundamentals — inventories are projected to be the highest in 10 years — the bias is to the downside.

 

Wheat Since 2009:

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