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Levels to watch: gold, silver and crude

Profit-taking is likely to be driving pullbacks as global growth fundamentals remain weak.

CFDs are a leveraged product and can result in losses that exceed deposits. Trading CFDs may not be suitable for everyone, so please ensure you fully understand the risks and take care to manage your exposure.
Oil barrels
Source: Bloomberg

Overbought gold re-testing lower levels

Gold prices are down 1% having posted a high of $1,307.6 on Friday, coinciding with an overbought reading in the pair’s relative strength index. This resulted in a pullback to its current level of $1,283, which is now likely to re-test a previous area of support at $1,274. Should downside support fail to hold then the next area to be tested is its 200-hour moving average, currently trading at $1,274. However, should downside support hold, a re-testing of upside resistance is likely to be seen at $1,302.

Silver upside capped by 200-DMA

Silver is down 2% on Monday having failed to sustain a move above the 200-day moving average ($1,819), which has since seen price action break down through its 50- and 100-hour moving average. The latter is likely to act as an area of topside resistance, which if held could see $17.70 come back into play. However, the recent turnaround has resulted in an oversold reading of 28 in its RSI, which suggests that a short-term pullback is likely to be seen, which could see a re-testing of $1,815.

Brent under pressure once again

Brent prices continue to be hampered by an unwillingness of key players to curb production levels at a time of scant demand. Brent is trading at $48.08 on Monday, dipping below long-term support of $48.19, which if now turning into resistance could well see a move lower to the next key technical level of $45.21 – a move supported by its 50-, 100- and 200-hour moving averages. However, should a move below $48.19 fail to be sustained then $48.77 – a level which has seen both the 100- and 200-hour moving averages converge, is likely to become the next upside target.

WTI double-bottom looking to be re-tested

WTI prices re-tested downside support at $44.35 for a second time on Monday, which has once again seen price action bounce higher to its current level of $45.05. This could see a further move higher toward its 50-hour moving average, currently trading at $46.72. However, the recent reversal remains in contractionary territory at 37 in its RSI, which could signal a possible re-testing of downside support at $44.35. If broken at the third time of asking, this could see a targeting of $43.30.

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CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.