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Levels to watch: gold, silver and crude

Continuing strength in the US dollar sees commodities still unable to rally, with the downside scenario still intact.

Gold bars
Source: Bloomberg

Markets are generally struggling on the lack of significant news, but it still looks like commodity prices are fated to go lower for the time being. All eyes are on the US dollar, with commentary from the San Francisco Federal Reserve about market complacency on US interest rates giving the dollar another shove higher.

Gold still heading for $1240

The metal continues its steady move lower, and still targets the $1240 area. There has been no turnaround in the daily relative strength index, which is still heading towards the oversold zone.

Any break through $1240 would target the $1228-$1230 region, while the metal must manage a close back through $1257 if it is to stage a modest rally.

$19 level propping up Silver

The $19 level is doing an admirable job holding up silver at present, with a short-term bounce from current oversold levels indicating a move back towards $19.20.

The area to watch on the downside is still $18.75, the lows from June. If silver can retake $19.20 then $19.50 becomes a potential resistance level on the upside.

Brent could close below $100

Brent may manage to see its first daily close below $100 today if the downtrend holds steady, the first such incident since April of last year.

The $98.95 region is the first area of support to watch for, and if this is broken we look towards the 2013 low around $97.40. On the upside Brent must recover $100 and then move through $100.40.

WTI supported by $92.80

The $92.80 level is holding up as a support zone for WTI, and a drop through here targets the area just below $92. With the daily RSI still not flashing an oversold reading there is reason to think we will see further downside.

Any move higher must clear the 20-day moving average around $94, with a further upside target at $96.

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