This year, Dollar Index fell %6.10 and with this help, the Bloomberg Commodity Index is testing a 12-year trend. Since the 2008 crisis, commodity prices have been falling because of low inflation and slow growth. In this year, however, despite the Covid-19 slowdown, massive stimulus packages and asset purchases fuel the commodities. 75.050 level will be critical for the long-term direction.
This year’s one of the biggest supporters of the Commodity Index is without a doubt, Gold. Rising global debt and ever-increasing asset purchases drive the Gold to its historically high levels. Cup formation with the 1800 neckline indicates not only fundamentals, but technicals support future rises as well.
Base metals, most importantly Copper has been supporting the Commodity Index too. First in July, Copper broke the 10-year trend and in November, the price broke the last top of 2018, 332 as well. Technical wise, there is no indication that this upside moves to stop.
If Bloomberg Commodity Index breaks the 12-year trend, we may see another great year for commodities.