Rising CRB Index Signals Commodities Rally

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Commodities

The CRB index has once again breached a ceiling, signaling a strong rally.

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The CRB index now stands just 1.5 points below its 2017 peak, which occurred at the beginning of the year.

Source: MetalMiner analysis of TradingEconomics

Oil prices have led the latest commodities rally.

Energy accounts for up to 39% of the entire commodities basket, and oil serves as one of the largest energy components of the index.

Actual output cuts from Saudi Arabia, as well as political turmoil, have led the oil price surge. Oil prices have traded sideways for a long time, and at some point in time would have changed direction.

Source: MetalMiner analysis of TradingEconomics

Industrial Metals

Contrary to commodities, industrial metals have fallen slightly this month.

The base metals bull rally has slowed down, creating price pullbacks. Price pullbacks often occur in bullish markets, especially those metals with high volatility. Furthermore, price pullbacks create buying opportunities.

Source: MetalMiner analysis of StockCharts

In rising markets, buying organizations will want to follow how commodities, industrial metals and each particular metal behaves before committing to purchases.

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To learn more about how to reduce risks when committing to long-term purchases and when to just buy as needed, check out our free Monthly Outlook trial.

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