EUR 549.64 For Business Accounts Only

COMMODITY OUTLOOK - Correction for Base Metals | Energy bullish until Mid-Year

In This Edition: The financial markets have caught the inflationary bug! Several prominent financial protagonists including bond fund manager Bill Gross have sounded alarm-bells that inflationary pressures could accelerate resulting in a break-out to the upside for U.S. long-dated interest rates whilst others are expecting huge price gains in several key commodities basis a weaker US$ dollar. Speculation that the US$ dollar index will crash in 2018 towards 80.00+/-, a decline from current levels of -11% per cent on top of -14% per cent already has suddenly become mainstream. China’s growth forecasts for 2017 came through better-than-expected at +6.9% per cent which has also garnered bullish consensus for Base Metals whilst a potential break-out for Precious Metals, above the 2016 peaks for gold and silver are fueling those inflationary expectations.

This February edition of the Elliott Wave Commodities Outlook addresses the topic of a break-out inflationary advance for prices, similar to the way the Energy markets have surged higher from last year’s retracement. But we have reservations that such action will be duplicated. Don’t get us wrong – we’re a huge advocate for the prolongation of what we term as the ‘INFLATION-POP’, but the TIMING has to be right. From empirical comparisons across several financial asset classes it becomes clear that rather than a commodity ‘BREAK-OUT’, a ‘FAKE-OUT’ could occur in Q1’18 where prices momentarily stretch to new 2-year highs, but then pull back lower again. This report examines that possibility as we take an introspective look across Base Metals, Precious Metals and the main Energy contracts of Crude/Brent Oil.