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COMMODITIES OUTLOOK - December 2016

• Highlights
  • Base Metals – The base metals sector has realigned itself to other major commodity markets in confirming multi-year uptrends began late ’15, early ’16. Copper broke initial overhead resistance at 5131 into the second week of November and later the 5505+/- area which negates the downside risk of a breakdown to retest the January lows. Its continued thrust higher has confirmed January’s low as ending the entire 5-year counter-trend decline that began from the Feb.’11 highs as primary wave B. Primary wave C is now in its early stages of a new major uptrend – it means that Copper has joined many other commodities in triggering the next stage of the ‘INFLATION-POP’. Medium-term upside targets remain unchanged towards 13920+/-. Intermediate-term, over the next few months, copper is expected to test key upside targets towards 6783+/-. Shorter-term, a test to 6150+/- followed by a retracement towards 5600+/-. Aluminium’s advance from the Nov.’15 low has undergone several price-overlapping sequences but taking the form of a five wave diagonal. Whilst this begins its medium-term uptrend, shorter-term, it is in a terminal phase which heightens the probability of a downside correction. Lead prices have overcome key resistance levels above 2162 in November which annuls any sizable downside risk that existed beforehand. It confirms the Nov.’15 low as ending its entire 5-year counter-trend phase as primary wave B with wave C now in its early stages of a multi-year advance with upside targets to new record highs. Shorter-term, an exhaustion high at 2551 means some retracement declines ahead, lasting across the New Year. Zinc led the pack earlier this year and is the first to complete a five wave impulse upswing from tis Jan.’16 low at current prices levels of 2970+/-. A multi-month corrective downswing is forecast although medium-term, it too remains locked into a huge uptrend which is ultimately destined to trade into new record highs. Nickel prices have unfolded higher from last February’s low into a five wave impulse pattern – this also confirms a new multi-year uptrend has begun although shorter-term, a counter-trend decline is likely.
• Precious Metals – Both gold and silver have declined as forecast last month – downside targets have been reached, gold to 1176.10-68.04+/- with prices recording 1171.44 and silver towards 16.36+/- with a print to 16.17. Momentum indicators have reached an oversold condition whilst near-term composite cycles are also forming important troughs in late November, early December. This suggests prices are ready to respond higher into year-end and across into New Year. Despite downside targets being reached, counter-trend patterns from the July/August highs remain INCOMPLETE. This suggests only an interim low formed recently – the current advance is another counter-trend sequence – once upside targets have been achieved, an additional but FINAL decline will unfold. This can take gold down towards 1122.75+/- and silver towards 15.17+/- or max. 14.68+/- prior to ending the entire counter-trend pattern from July/August’s highs. Medium-term, the outlook remains bullish. Updates include the Gold/Silver Ratio, GDX, XAU and Platinum. For information in individual gold and silver mining stocks, please contact us to review our EQUITIES subscription services.
• Energy – Recent updates for Crude and Brent Oil forecast a corrective decline unfolding from June’s highs, specifically and expanding flat pattern, composed of three main price-swings, down-up-down. The first two sequences have now completed, the final sequence is currently engaged to the downside with targets remaining unchanged, towards 36.70-35.25+/- and 37.88+/- respectively. Recent comments from the Saudi Arabian delegation arriving in Vienna for OPEC’s latest meeting have said they will postpone negotiating with non-OPEC member’s proposed production cutbacks. This means the fundamental flows are in sync with the Elliott Wave downside forecasts. It may take another 2-3 months before downside targets are completed – the medium-term uptrend can then resume higher.

​ In This Edition: Twenty-six charts are included in this month’s report including several updates of near-term cycle analysis. New additions include a monthly composite cycle for Zinc together will regular updates for Copper, Lead, Gold, Silver and Crude Oil. We also include latest forecasts for Aluminium and Nickel (please see EW-Forecast database for all time-series). Don’t forget that many commodities have alternate counts - to view these, log-in to the EW-Forecast database, then right-click on the background of the chart to activate menus or left-click the icons at the top-right of the text-area in the full-view area of the EW-Forecast database. Please contact the ‘Help-Desk’ located at the top of wavetrack.com if you need assistance.