What’s happening in the market?
Dom Pérignon 2002 is the top-traded wine of the week so far by value. It changed hands in low volumes at £1,674 per 12×75 and in high volumes, above its Market Price of £1,840 at £1,886.
Petrus 2005 is in as the second top-traded. While trade prices of 75cl format have remained fairly flat over the course of 2024, prices of larger formats have been less resilient. This week, a single double magnum traded for £18,883, 14.2% below the last double magnum trade in April at £22,000.
Today’s deep dive: The Domaine Armand Rousseau, Chambertin index
- Having crossed below its long term upward trendline in early 2024, the index has continued to fall, pushing the short-term bearish trend into the medium-term.
- The index is approaching a crucial support level – its 2018 peak. A bullish divergence arising in its Relative Strength Index provides some hope that the support may hold.
- With the demand-supply ratio still out of balance and the index’s medium and long term simple moving averages converging, downward price swings cannot be ruled out.
During the Burgundy bull run in 2021, Armand Rousseau Chambertin’s bid-to-offer ratio (by value) soared, sitting at 4.0 by January 2022. In other words, demand for Rousseau Chambertin outweighed supply four times over. As of January 2025, the bid:offer by volume sits at just 0.04. Trade volumes have been decreasing since 2019, and in many cases, prices have fallen by over 40% since peak. How much lower will prices have to fall to rebalance the market and reinvigorate demand?
The Domaine Armand Rousseau, Chambertin price index, currently sitting at 278, has fallen significantly since its peak at 435 in September 2022. Having sustained a robust upward trend since its inception, market dynamics have now shifted. Supported since its inception by its long term upward trendline, the index broke below in early 2024 and has continued to fall.
Just as the crossing of the SMA7 below the SMA20 in mid 2023 signaled a short-term bearish trend reversal, the recent convergence of the SMA20 and SMA50 may signal a medium-term trend reversal – prolonged bearish momentum.
Still, there is some hope that the index may soon find its floor. It is fast approaching its horizontal support at its 2018 peak at the 272 level. A double bottom pattern and weak bullish divergence arising in the Relative Strength Index as it tests the 30-line (oversold territory) bolsters the likelihood of this possibility. Bullish divergences like these indicate a potential slowing of bearish momentum and are often an early sign of a reversal. However, for confirmation, it is crucial to see the price hold key support levels and exhibit follow-through in the form of higher highs or a reclaim of key moving averages.
Should this level fail, however, the next available support is a decent stretch lower at 204. Proponents of Fibonacci mathematics may also identify the 78.6% retracement level at 253, coinciding with the March 2020 lows, as an additional intermediary support.
The Bollinger Bands (BB), which measure volatility and price extremes, often act as a dynamic support level. Although the lower BB appears to be flattening somewhat, indicating reduced volatility, it remains relatively far from the price.
The price sits close to a key support level with some promising signs of reduced bearish momentum. While downside risks remain, the nearing support zone and oversold conditions could attract some buying interest and trigger a reversal. Close attention to support and resistance levels, as well as confirmation signals from the RSI and BBs, will be critical in determining the index’s next major move.
Some vintages may be closer to reaching their price floors than others. The 2018 serves as such an example. Trading very infrequently through the turn of the market, the wine saw demand for SIB cases (at 2021 prices) return in 2024.
Liv-ex trades of Domaine Armand Rousseau, Chambertin 2018
Liv-ex analysis is drawn from the world’s most comprehensive database of fine wine prices. The data reflects the real-time activity of Liv-ex’s 620+ merchant members from across the globe. Together they represent the largest pool of liquidity in the world – currently £100m of bids and offers across 20,000 wines.
