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Gold positivity diminishing
Hopes of an extended gold rally have been severely dented, if not eliminated entirely, with today’s 2.5% drop.
The slump back from $1340, and then through the key $1320 level, has put the emphasis back on the downside.
On the hourly chart some support may be developing at $1306, while the metal remains sharply oversold and may witness a more extended bounce-back in coming days.
Silver has little support at 200-DMA
Pacing gold loss-for-loss is silver, now through $21/oz.
It has run into the 20-daily moving average, and a major short-term support zone around $20.80. It is also no longer overbought on the daily Relative Strength Index for the first time this month.
If buyers do enter the fray around $20.80, then we may see a recovery develop here. Aside from that, there is little support to be found ahead of the 200-DMA around $20.30.
Brent crude could reach $110
Brent has found significant support at $107, a key level that has held since the beginning of May.
Now, the next hurdle to the upside is the $109 region, around the 200-DMA.
It is too early to say that this market has turned a corner but a build on the move seen today could see an eventual push back towards $110.
US light market has steadied
Although it has found buyers above the 200-DMA, NYMEX looks less promising than the situation in Brent.
Having dived towards $100 the market has now steadied, even if the RSI has yet to move upwards.
In the short term a move back to $102.70, the high from the Wednesday and Thursday sessions, would signal increasing optimism.