Editor’s Note
This analysis from Samco Securities suggests a pivotal shift may be underway, with the commodity supercycle potentially entering an energy phase led by crude oil.
Signs of significant activity are emerging for investors in the commodity market. Brokerage firm Samco Securities, which had already correctly predicted the major rally in gold and silver, now appears extremely positive about crude oil. Apurva Sheth, Head of Market Perspectives and Research at Samco, believes that the energy phase of the commodity supercycle is now beginning. He stated that the way the global benchmark has shown recovery from the $55 level is quite significant technically and structurally, and a major leap in oil prices could be seen in the coming period.
According to Apurva Sheth’s analysis, WTI Crude has started forming a bullish higher high and higher low structure on the chart, which clearly indicates an uptrend in prices. It is worth noting that currently, this commodity is moving strongly towards the $66 level. Technically, the $62 to $63 level forms a strong support zone, while a deep base is seen around $59. If crude oil successfully breaks through the $66 resistance level, it could easily reach the $72 to $73 level in the coming period. The Relative Strength Index (RSI) staying above 50 indicates that positive momentum in the market is still intact.
Behind this rally in the market are not just technical charts, but also several fundamental reasons. Apurva Sheth believes that the slowing pace of the shale revolution in the United States and the low investment made over the past several years to increase production capacity have put pressure on supply. Along with this, the possibility of large countries like China refilling their strategic reserves has strengthened the demand side. Although rising political tensions between the US and Iran have caused oil prices to rise somewhat sharply, in the long term, changes in supply and demand will help push its prices higher.
Speaking about the future of gold and silver, Sheth indicated the possibility of a role reversal. After silver’s stellar performance over the past six months, gold may once again gain momentum, while silver could enter a consolidation mode for some time. For gold, he has set extremely high long-term targets, including levels of $3,335 and $4,750 based on Fibonacci projections. It is also worth noting that over a long period of three years, gold could even reach $7,040. In such a scenario, looking at historical relationships, silver prices could range between $140 and $210, indicating a major rally from current levels.