Commodities are awakening from their slumber which is sparking renewed global inflation fears. Due to escalating global tensions, crude oil has surged more than 10% since the start of March which has seen the price per barrel close above $90 per barrel last week. Precious metals along with industrial metals have also benefitted from the rise in oil prices which has seen the Reuters Core Commodity index climb to a 6-month high. As mentioned previously, the Federal Reserve’s (Fed) fight against inflation is essentially its fight against oil and this recent break-out in commodity prices has poured some cold water on the expectations that the Fed will start cutting rates as soon as June this year.
The index will test the resistance level of 300, the 61.8% Fibo retracement, soon and a break above this level will allow the current commodity bull to race towards the 2022 high of 330.
The index will test the resistance level of 300, the 61.8% Fibo retracement, soon and a break above this level will allow the current commodity bull to race towards the 2022 high of 330.