Looking at DBC’s chart, “you can see that the bulls pushed the price of the fund above the resistance of a key trendline back in December. The sideways price action that has dominated the sessions since the breakout suggests that the bulls were waiting on the sidelines for Trump’s speech to help gauge the speed and likelihood of major reform,” according to Investopedia.
Gold, the fifth-largest weight in DBC, has also been showing signs of rebounding after faltering late last year.
Gold has enjoyed greater demand in a low interest-rate environment as the hard asset becomes more attractive to investors compared to yield-bearing assets. However, traders lose interest in gold when rates rise since the bullion does not produce a yield.
“The proximity of the upward-sloping moving averages now suggests that the risk-to-reward ratio is becoming more lucrative by the day and most will likely set their stop-loss orders below $14.90 to protect against a significant pullback. Given the strengthening fundamentals, lucrative risk/reward and defined chart pattern discussed above, it seems as though at this point, the odds of a sharp move is in favor of the bulls,” according to Investopedia.
For more information on the commodities market, visit our commodity ETFs category.
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