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The Week Ahead in Commodities

By February 18, 2013

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Commodities come into this holiday shortened week a little on the defensive side.  Gold and silver had a downside breakout from their triangle consolidation.  I don't know how much more we will see, but the bulls are a little worried.

Crude oil has been defending the $95 level very strongly.  Until we get a serious breech of support at 95, traders will continue buying down there.  I think a lot of traders expect to see $100 crude fairly shortly.  Frustration could set in if the market can't push up there and they will most likely try to wash the longs out on the downside.

The grains are also on the ropes coming into this week.  They got hit fairly hard the last couple weeks.  The South American weather is fairly cooperative and it looks like we will see large crops for corn and soybeans.  That will put pressure on our exports and prices could be weak in the foreseeable future.  It will probably take weather issues this spring in the US to support a rally in the grains.

Investing is commodities is not always easy.  It usually pays to take a long term approach.  The markets have been bouncing back and forth the last few months with no major directions.  A good trading strategy can capture profits on these moves, but inexperienced trades need to be careful.

 

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