- It don't come easy. You know it don't come easy. It don't come easy. The future won't last, it will soon be over tomorrow.
- Ringo Starr - Beatles
The year is ending, but trading continues. With that in mind, it is time to look forward. I present to you three commodities to observe. They will corelate to many aspects in our economy and our standard of living, especially since the inflation genie is out of the bottle.
OIL
It is the most important. It heats your house, moves your vehicle and it is used in many products. The new virus variant has captured the mental state of society and the economy. It won't last, but the concept of new variants will pose more anxiety. This is why oil took another dive last week. Crude settled at the $66 - dollar level. If you look at the charts, this is the same price range as last Dec. 2020. If you recall, oil sank to $10 - dollar level by April 2021. Then, the reality of shortages appeared. Oil rebounded to $35 - dollar range. After a brief consolidation, it spiked to $85. Then, we had another retracement - consolidation range. However, the fears of the new virus variant have dropped crude back to the price range of Dec. 2020. Question? Where does it go? Like Ringo sings, "It don't come easy..." Oil has a strong resistance price at $60 - dollar level. If it breaches that level, we could see a return to the price action from Dec. 2020 to April 2021. Maybe shortages could return and cause another spike? Do your homework!
GOLD
The battle will always continue the war between fiat (status quo) and hard currency (Founding Fathers). This is why it is so hard for gold to rise to its minimum price = $2600. With that said, gold at the moment is in disharmony. On the negative side, the gold price is below its 50 - day and 200 - day moving average. On the plus side, a reverse Head and Shoulders price pattern has appeared on the weekly chart. Question? Where will it go? Like Ringo sang, "It don't come easy..." Gold has a strong resistance at $1700 price level. If it falls below that, we are in trouble. On the upside, $1950 is the top of the range. If it penetrates higher, we enter a bull market to possibly $2500. This is my prediction. Let's hope but do your homework!
COPPER
The good doctor knows all. With inflation, copper is at all-time highs. At present, it has consolidated at the highs. The virus scare will dent new highs, but price inflation has a longer effect than a virus. One can see this in the chart price. Even with big market pullbacks, copper is above both its 50 - day and 200 - day moving average. This makes it very strong. The infrastructure bill will add a floor to the price as well as electric vehicles. Copper could become the best performing product in the future. Only time will tell - sing it Ringo, "It don't come easy..." Then, of course, inflation will cause medical prices to rise. This means it will cost more to see the good "Dr. Copper." Ha! Ha! Peace.
