Commodities trading overview for Q3 2020 Gold, Silver, Copper, Brent Oil
GOLD (XAUUSD)
In a fashion similar to a 2011-2015 downtrend now in a different direction Gold is reaching the 1900-1920 resistance in long-term Andrews Pitchfork channel with well-defined breakout levels which can be seen on the Comex Gold Futures monthly chart. In the last 11 months, the instrument formed a giant rising wedge which for the moment is indicating a strong potential upside continuation and a break above 1900. But is the Gold ready for a breakout before the pullback to Cup&Handle support 1700?
By looking at the daily chart we can see that the rising wedge 5 waves are coming to an end and we are near the reversal which can happen in Q3 2020, more so by taking into consideration Gold positive correlation with Indices which are beginning the reversal down. Brief rip up to 1920-1950 is not excluded before a reversal down to diamond formation support 1650-1700.
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SILVER (XAGUSD)
Silver is in the process of breaking above 21.36 long-term horizontal resistance on a monthly chart. Next week trading will mark this break as a fake or a confirmed monthly break A previous break below monthly 6 years range low 13.40 proved to be fake. As a Gold, it is in a long-term rising wedge formation with much more space for swing down and up.
Silver Daily chart is revealing more near-term weakness then Gold. Inside bars formed in the last two days could lead the instrument for a pullback to retest 21.30 and even lower to rising wedge support line in the coming weeks and months of Q3 2020. A break below 21.30 and 20 would be a warning sign that the instrument would be back in the long-term range.
COPPER
The most interesting situation can be seen by following Copper price action. The monthly chart indicates long-term falling trendline resistance 2.90-3 zone. What is more, it is again backtesting the previously broken Gan line long-term resistance. Copper is also an indicator of risky assets reversals. The daily chart below is exposing the top formation with the instrument testing 2.88 a key downside reversal level. Beak below this level will expose a test of 2.60-2.70 zone in the final quarter of 2020.
BRENT OIL
Finally, Bret Oil is the most potent trade in the case of a risk-off environment and commodities overall downside reversal. Downtrend channel is perfectly shaped and we had a rejection from 45 making this an isolated island short trade opportunity a high probability. Break below 43 will lead to a middle channel backtest somewhere in the 23-25 zone.
We have used the combination of the top-down trading analysis to get these key levels explained in the charts.
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