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Levels to watch: gold, silver and crude

The week has started on a difficult note for commodities, principally driven by a slightly stronger dollar, which is doing its best to recover from Friday’s NFP reading.

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 plant
Source: Bloomberg

Gold's bullish momentum stalls
Gold finds itself bouncing along the rising trendline from the lows of 7 May, but a failure to hold ground around $1190 suggests that the short-term bullish momentum has come to an end.

Friday’s spike higher did not last long, and thus we look towards Thursday’s low of $1180 as first-line support. This will be followed by the $1170 area that saw buyers step in during the session on 1 May. Any rally must push through $1190 and then move on to $1200, where the bounce on 5 May stalled.

Silver in similiar situation to gold
A similar picture prevails for silver, with $16.50 proving to be significant resistance on the upside, while dips towards $16.30 have provided support. A move upwards would head towards $16.70, where bounces stalled last week, while the price action from 7 May confirms that $16.20 would be a key area to watch for. A more sustained move would head towards $15.90, the lows of 30 April/1 May.

Brent in retreat
The retreat from $70 for Brent crude is still in progress, and a move below $65 would suggest that we are looking at a more sustained pullback towards $60. An attempt overnight to break the descending trendline from last week’s high was defeated, which suggests the bears are still in charge. Friday’s low around $64.20 should be closely watched, as it marks support from the end of last week and from 29 April.

WTI struggling to break through $59.50
So far $58.50 has been holding up well as support for WTI light, but any move through $59.50 has rapidly run out of steam. Nonetheless the hourly descending trendline from Wednesday’s highs has been broken, which indicates some buying pressure is still present. A move back through $60 would target last week’s highs at $62.

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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.