The long-term trend for commodities – gold, silver, copper and miners – remains down at this time. Could the long-term bear trends be coming to an end? It's possible.
This chart looks at the Australian dollar, highlighting that the AUD has spent the majority of the past 30 years inside of the blue shaded rising channel. The correlation between the AUD and commodities has remained high over the past 30 years.
The AUD created a “W” (Double Bottom) back in 2001 as a 13-year bear market was coming to an end as a new 10-year bull market was getting started. As the AUD was moving moving higher from 2001 to 2011, gold, silver and commodities went along for the ride.
The AUD peaked in 2011 as it was hitting the top of this 30-year channel, where a major trend reversal took place. As the AUD was peaking in 2011, gold, silver, miners and commodities did the same. The 7-year bear market in the AUD has it now testing 30-year rising support at (3).
The AUD is testing 30-year support at (3), with momentum oversold. If 30-year support holds and it breaks above falling resistance, it will send a bullish message to gold, silver and commodities not seen in years.