Glencore Share Price: Is GLEN a Buy in Times of a Recession?

Glencore share price moved sideways this week as investors worry about the global economic slowdown. GLEN, one of the biggest mining and trading companies in the world, has seen its stock price drop from the year-to-date high of 548p to the current 471p. It remains about 33% above the lowest level in 2022 and 207% above the lowest point this year. As a result, its total market cap has jumped to over 61 billion.

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Global economic slowdown

Glencore share price has been in a strong bearish trend in the past few months as investors worry worry about the global economy. Analysts believe that the economy will have a significant contraction this year. For example, recent economic data from China has not been encouraging and the situation will continue to worsen. Chengdu, a region of over 21 million people moved into a lockdown as the number of Covid-19 cases jumped. 

Europe is also expected to sink into a recession as the European Central Bank (ECB) has continued its tightening process. This week, the bank decided to hike interest rates by 0.75%, the biggest increase in more than two decades. The UK is also staring at a recession as the country’s energy crisis accelerates.

All these factors have dragged commodity prices in the past few months. For example, lead has dropped o the lowest level this year. Copper has also crashed hard from its highest level this year. The same is true with other commodities like zinc and iron ore that have dropped prices. In most cases, Glencore share price does well in a period of high commodity prices.

While prices have dropped, there are several catalysts for Glencore. For one, the company sells its products in US dollar and reports its results in British pound. Therefore, there is a likelihood that the company’s earnings will be boosted by forex change. Also, the company will likely benefit from the rising demand for some key commodities like coal.

Glencore share price forecast

The daily chart shows that the GLEN share price has moved in a tight range recently. As a result, the stock is wavering at the 25-day and 50-day exponential moving averages. The MACD has started pointing downwards. A closer look shows that Glencore has formed what looks like a triple-top pattern. 

Therefore, there is a possibility that the stock will resume the bearish trend. If this happens, the next key level to watch will be at 395p, which is the neckline of the triple-top pattern. A move above the resistance at 500p will invalidate the bearish view.

Glencore Share Price