I have been seeing a lot of posts and opinions about the future of commodity prices. I am sure you have too. Many of these opinions are based on temporary bottlenecks and stockpiling or temporary production problems due to Covid. It is a top-down approach and basically ignores individual supply/demand situations.
As a veteran of the inflationary 1970s and early 1980s I have a different take on the situation. Let me illustrate with two charts.
In this long-term line chart of the Invesco DB Commodity Index Tracking Fund with the symbol (DBC) , below, we can see that prices have broken out on the upside from a six-year base pattern. A six-year base tells us that this rally has room to run and it is not a short-term blip on the charts. Key chart resistance at $18 was broken. DBC is trading above the rising 40-week moving average line.
The weekly On-Balance-Volume (OBV) line has been moving higher from early 2020 and is not a new thing. The Moving Average Convergence Divergence (MACD) oscillator is above the zero line but has crossed to the downside for a take profit sell signal.