Commodities Snapshot: Divergence in Strength & Momentum

Lester Davids
Jun 20
2 min read

Updated: Jun 22

Research Notes For 23 to 27 June > https://www.unum.capital/post/r2327june

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Overall Summary: Divergence in Strength & Momentum

As of mid-June, the commodity complex shows a clear divergence. Brent Crude Oil remains in a consistently strong regime across all timeframes. In contrast, Precious and Industrial Metals, while strong on a longer-term basis, are exhibiting signs of exhaustion and waning momentum on shorter timeframes, with most being overbought or neutral. Palladium remains the clear laggard with an underlying weak regime.

Brent Crude Oil

Monthly: Strong
Weekly: Strong
Daily: Strong
Insight: Brent Crude is displaying unanimous strength across all measured timeframes, indicating a robust and consistent uptrend.

Gold

Monthly: Overbought
Weekly: Strong
Daily: Neutral
Insight: The long-term trend in gold is very strong but has reached an overbought condition. The short-term daily timeframe has turned neutral, suggesting a loss of immediate momentum and a potential period of consolidation or pullback.

Silver

Monthly: High Bullish Momentum/Approaching Overbought
Weekly: Strong
Daily: Neutral

Copper

Monthly: Strong
Weekly: Neutral
Daily: Neutral
Insight: While the long-term monthly trend for copper remains strong, both the medium-term (weekly) and short-term (daily) trends have lost their directional bias and have turned neutral.

Platinum

Monthly: High Bullish Momentum
Weekly: Overbought
Daily: Strong
Insight: Similar to silver, platinum is in a very strong trend but is showing signs of being over-extended. The weekly chart is in an overbought condition, signaling caution is warranted despite the ongoing strength in the daily and monthly trends.

Palladium

Monthly: Weak
Weekly: Neutral
Daily: Neutral
Insight: Palladium is the weakest commodity in this group. The underlying long-term (monthly) regime is weak, and the shorter timeframes lack any directional conviction, indicating a period of consolidation within a downtrend.

Lester Davids

Senior Investment Analyst: Unum Capital