Gold, silver, copper and oil costs may all fall 13% or extra, Credit score Suisse says

Gold, silver, copper, oil and different commodities all look overvalued in technical phrases and will fall 13% or extra from right here, in response to Credit score Suisse’s charting workforce.

“Commodities have confirmed a small head and shoulders prime, and we’re turning bearish on the asset class,” Credit score Suisse technical analysts left by Managing Director David Sneddon wrote in a brand new observe. “We see sufficient technical proof to show commodities as an asset class into unfavourable over a 3 to 6 month funding horizon.”

Analysts argued that:

Oil may drop almost 30%

Credit score Suisse technicians see oil (CL1:COM)(CO1:COM)(NYSEARC:USO) as dealing with the most important potential decline, with Brent crude probably falling to $63.02 a barrel – a 28.9% drop from Thursday’s $88.66 degree.

“Brent Crude Oil has now clearly damaged beneath the essential $92.09/90 help zone – the 38.2% retracement of the 2020/2022 rise – and we anticipate additional weak spot in direction of the underside. 50% retracement to $77.56,” the analysts wrote.

They added that if Brent (CO1:COM) breaks the $77.56 help degree, the commodity would then check its December 2021 low at $65.72.

A break beneath that might ship Brent (CO1:COM) all the way down to $63.02 – a 61.8% retracement of its 2020-2022 positive factors “the place we’d anticipate a extra sturdy consolidation/counter-move to be established,” the specialists wrote.

Silver is poised for a possible 17% drop

Credit score Suisse chartists observe silver’s current failure (NYSEARC:SLV) on the most resistance at $21.39 per ounce, indicating a pullback in direction of a help degree of $15.56. This may signify a drop of round 17% from the metallic’s worth of $18.71 on Thursday.

“Above $21.39 stays wanted to clear the highest,” the analysts wrote.

Copper may lose 15.5%

Technicians stated that with copper (HG1:COM) presently buying and selling beneath its 55-day common, “the commercial metallic stays in a well-defined technical downtrend. With a big prime nonetheless in place and a market beneath the declining long-term transferring averages, we stay biased in direction of additional weak spot.

Copper (HG1:COM) traded at $7,422 per metric ton on Thursday in London, however Credit score Suisse chartists wrote {that a} break beneath $6,844 may ship the metallic as little as a technical help degree at 6,300 $/$6,269.

Gold May Fall Almost 14%

Credit score Suisse wrote that since gold (XAUUSD:CUR)(NYSEARC:GLD) has already confirmed a serious “double prime”, the metallic may fall to $1,440 per ounce. This may signify a decline of 13.7% from Thursday’s $1,668.60.

“We anticipate additional weak spot at $1,600, then $1,560 and eventually [at gold’s March 2020 low of] $1,451/40,” the analysts wrote. “Solely a convincing break above the 55-day common at $1,725 ​​would ease the stress on the valuable metallic.”

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