Rising crude lifts all commodities?

Crude is rising, with Nymex Light Crude respecting its new support level at its former two-year high of $54/barrel, indicating a primary advance.

Nymex Light Crude

The general rule is that rising crude prices lift all commodities. Crude prices are a major factor in commodity prices due to the high energy costs of extraction (hard commodities), cultivation (soft commodities) and transport (both hard and soft).

The broad DJ-UBS Commodity Index is retracing but likely to respect the rising trendline, with a rally testing resistance at 90.

DJ UBS Commodity Index

Copper also shows some weakness at present but respect of primary support at 6400 would confirm the up-trend.

Copper Grade A

Iron ore is headed in the opposite direction, however, as the Chinese real estate market slows. But expect strong support between $48 and $54/tonne, especially if the rise in crude prices continues.

Iron Ore

Even gold prices tend to rise and fall in unison with crude over the long-term.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s