Credit Suisse says gold, silver, copper and oil prices could all fall 13% or more

Credit Suisse’s charting team says gold, silver, copper, oil and other commodities all look technically overvalued and could drop 13% or more.

“Commodity confirmed a small ‘head and shoulders’ top and we turn bearish on the asset class,” Credit Suisse technical analysts authorized by CEO David Sneddon wrote in a new note. “We see enough technical evidence to change the commodity as an asset to negative over a three- to six-month investment horizon.”

Analysts argue that:

Oil could drop nearly 30%

Credit Suisse technician looks at petrol (CL1: COM) (CO1: COM) (NYSEARCA:USO) in the face of the biggest potential drop, with Brent crude oil prices likely to fall as low as $63.02 per barrel – down 28.9% from Thursday’s $88.66.

“Brent crude has now clearly broken below the critical support area of ​​$92.09/$90 – the 38.2% retracement of the 2020/2022 rally – and we forecast further continuation,” the analysts wrote. continues to weaken towards the 50% retracement at $77.56,” the analysts wrote.

They add that if Brent (CO1: COM) breaks the $77.56 support, the commodity will test the December 2021 low of $65.72.

A break below could send Brent (CO1: COM) dropped to $63.02 – 61.8% retracement of the 2020-2022 rally “where we expect a more sustained consolidation/resistance to be established,” the experts wrote.

Silver is ready to drop 17% potential

Credit Suisse chartists notice silver’s recent failure (NYSEARCA:SLV) to the top resistance at $21.39/oz as pointing to a pullback towards the $15.56 support. That would represent a roughly 17% drop from the metal’s $18.71 price point on Thursday.

“Above $21.39 is still needed to negate top value,” the analysts wrote.

Copper can pour 15.5%

The technician said that with copper (HG1: COM) is currently trading below its 55-day moving average, “the industrial metal remains in a well-defined technical downtrend. With the big top still in place and the market below the long-term moving averages falling, we remain biased towards further weakness. “

Copper (HG1: COM) was trading at $7,422 a tonne on Thursday in London, but Credit Suisse analysts wrote that a break below $6,844 could take the metal to technical support at $6,300. / 6,269 USD.

Gold could drop nearly 14%

Credit Suisse wrote that since gold (XAUUSD: CUR) (NYSEARCA:GLD) confirmed a major “double top,” the metal could drop to as low as $1,440 an ounce. That represents a 13.7% drop from Thursday’s $1,668.60.

“We anticipate further weakness at $1,600, then $1,560 and finally… [at gold’s March 2020 low of] $1,451/40,” the analysts wrote. “Only a convincing break above the 55-day moving average at $1,725 ​​can ease the pressure on the precious metal.”

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