Bank of America Securities technical strategists say the commodities market is displaying a divergent trend: Brent crude oil prices are surging, targeting multi-year highs, while copper and gold are showing signs of fatigue under pressure from a strengthening US dollar.
Bank of America Securities technical analyst Paul Ciana wrote in a report released on Monday that crude oil remains the standout performer across the entire commodities sector, with multi-timeframe chart patterns indicating that a third-wave rally is now underway. Bank of America Securities believes its bullish stance remains intact as long as oil prices hold above $94. The analyst noted that a weekly close above $110 would open the door to a target range of $119.98 to $122.14, and potentially even $129 or higher.
Meanwhile, industrial metals and precious metals are struggling to sustain upward momentum. Copper prices, in the process of climbing to new highs, are forming a rising wedge top pattern, accompanied by TD Sequential exhaustion signals and oscillator divergence. A break below the key support level of $13,926 would increase downside risk, potentially pointing to $13,000 or even $11,700. If the copper miners ETF (COPX) falls below its 50-week moving average of approximately $80, it could trigger a double-top pattern.
Gold is also in a corrective phase. Bank of America Securities believes this correction remains insufficient in both time and depth to fully digest its multi-year rally. If gold can hold its yearly low of $3,943, it could eventually lay the foundation for a double bottom forming in 2027; however, the current correction still carries the risk of further decline toward $3,700.
The rebound in the US dollar has further intensified the pressure on metals. The US Dollar Index recently broke above 102.86, hitting an 18-month high. Technical projections suggest that as long as the upward trend support near 99.50 remains solid, the US Dollar Index could potentially climb further into the 104.59 to 105 range.
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