EUR 270.00 For Business Accounts Only

COMMODITIES OUTLOOK - June 2019 - US$ Dollar Correction of -2.6% - Minor Rallies for Base Metals but Heading Lower into September/October – Precious Metals Remain Bearish – Shorter-Term Rallies for Gold/Silver

In This Edition: As the U.S./China trade tariff negotiations intensify with the U.S. declaring an outright ban on corporations dealing with Chinese technology company Huawei, this month’s report focuses on the relevance of the US$ dollar to commodity prices. The US$ dollar index, our broad measure has continued higher as a counter-trend pattern since reaching a low in February ’18 at 88.26 – it’s recently up to 98.37 which is a gain of +11.45% per cent. The latest Elliott Wave analysis concludes more advances will develop over the coming months which is in direct consequence to the way that key economic commodities like Copper have performed over the same period – Copper is engaged in a counter-trend downswing that began last June and is down -20% per cent.

But that negative correlation between the dollar and other commodities is not necessarily consistent – precious metals, like gold and silver sold-off sharply last year when the US$ dollar index began accelerating higher, but since August, the dollar has range-traded allowing an upside recovery for gold and silver – so much so that gold erased most of the previous losses. And what about the energy contracts like Crude and Brent oil? – well, they have even less correlation. When the dollar climbed higher last year, most of its upside acceleration occurred between Feb.-Aug. ’18, a gain of +9.8% per cent – meanwhile, Crude oil traded higher during the same time, from 58.07 to 75.27.

It would seem that certain commodities are more sensitive to the US$ dollar’s movements than others – each sector, Base Metals, Precious Metals and Energy has its own rhythm which can be defined and categorised into specific Elliott Wave patterns. But there’s also certain other common denominators each share and that’s where it gets interesting – observed from a larger perspective, all are in transitory corrective phases within the decennial ‘ cycle which is set to drive commodity prices through-the-roof over the next several years – but this next phase of reflationary pressures is not yet ready to begin – and that’s why the US$ dollar is so important right now, because it provides the TIMING for an eventual dollar peak and a corresponding trough in commodity prices prior to the next price inflation-pop surge to record highs.