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COMMODITIES OUTLOOK - January 2019 - Commodity Prices to Resume ‘Inflation-Pop’ Uptrends in 2019 – After Shaky Drop!

Highlights

• The long-term positive-correlations between the economy, stock markets and commodities is an historical constant through each major peak and trough since the Great Depression – the next major peak is expected to see a similar, synchronised event, accompanied by typical signs of over-exuberance – specifically, the hedonistic buying of assets, both stocks and commodities with widespread public participation
• Calls for the beginning of a new secular-bear downtrend in U.S. stock markets does not correlate to the Elliott Wave pattern progression of Emerging Markets and Commodities. It is highly improbable that a correlative dislocation would occur at a time for this next generational peak – rather, the secular-bull uptrend for stock markets is set to continue, as are significant price rises for Commodities
• The Commodity ‘Super-Cycle’ that began from the Great Depression lows ended in 2006-08 (75-years) depending on different sectors – the counter-trend price-decline is unfolding into a multi-decennial Elliott Wave corrective pattern, an expanding flat or a double zig zag – cycle waves B or X are forecast to continue pulling prices higher over the next few years to an ultimate peak in 2022-24 – this is referred to as the ‘INFLATION-POP’, a rising period of inflationary pressures but within a larger deflationary cycle (expanding flat)
• Supporting the ‘Inflation-pop’ advance is the weakening US$ dollar – the index has a repeating 15.6-year cycle which last formed its peak in early-2017. The next major low is due in 2023-24. Elliott Wave analysis forecasts a major downswing into this time-frame, about -40% per cent lower  
• Base Metals 2019 – Copper prices began a multi-decennial counter-trend price decline from the super-cycle peak of 2006 – this is taking the form of an Elliott Wave expanding flat pattern, A-B-C, ‘SHOCK-POP-DROP’ – wave B’s advance is set to resume in 2019 but not before a shorter-term correction ends, sometime into Q1 – ultimate upside targets are to new record highs, as is necessary for the second sequence of an expanding flat. Aluminium has a more immediate, positive outlook of price advances having completed its corrective downswing from last year’s interim high in January – it too is forecast to new record highs. Lead and Zinc are both forecast lower to begin 2019 but ending corrective declines into Q1, then resuming ‘Inflation-Pop’ uptrends to record highs. Nickel began a counter-trend downswing from last year’s high but this is still a little way off completion – but the medium-term outlook remains very bullish. Tin is already higher by +14% per cent since last November – this uptrend is expected to continue over the next few years to record highs.
• Precious Metals 2019 – The question whether Gold and Silver ended their ‘Super-Cycle’ peaks in 2011 or are still continuing into the next decade remains in balance – either way, 2019 promises to be a revitalising year given that prices have been locked into a 2½ trading-range since July 2016 – Gold and Silver are forecast to accelerate higher although there is a short-term headwind of US$ dollar strength during next couple of months. Once the dollar resumes its 7.8-year cycle decline, Gold and Silver can push above the July ’16 peaks – Gold mining stocks are expected to outperform as they did in 2016 – ultimate upside targets are forecast to new record highs over the next few years with impressive gains in 2019 – Platinum is struggling to join in this uptrend until it completes its corrective downswing from the all-time-high of March ’08 – targets towards 610.00+/-. Palladium remains in a strong uptrend but begins 2019 with a sizable corrective downswing – once completed, pries resume higher targeting levels +84% per cent above current levels.
• Energy 2019 – A fascinating picture has emerged in the Energy markets – for Crude/Brent oil, the ‘Super-Cycle’ is confirmed ending into the year-2008 highs – a multi-decennial counter-trend correction is unfolding into either an expanding flat or a double zig zag. The former scenario allows Crude/Brent oil to extend to new record highs as wave B within the ‘Inflation-Pop’ phase, during the next few years – but this depends on ending last October’s sharp declines into Q1 ’19. The latter scenario depicts last October’s high ending wave X within the double zig zag scenario – that is very bearish but doesn’t fit within the ‘Inflation-Pop’ schematic across other asset classes so this becomes a low probability ‘alternate count’ scenario – the Energy XLE index is confirming Energy companies are set to trend higher over the next few years to record highs, representing gains of over 100% per cent – this is not possible unless Crude/Bent oil also reverse their current declines and head towards record highs.