The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication.
The US dollar and Treasury yields have risen this week on changed expectations regarding US monetary policy. If the Federal Open Market Committee meeting next week does take a more hawkish turn then commodities could see further falls. However, given the magnitude of the move seen in recent weeks it is entirely possible a short-term bounce may be in the offing.
Gold breaks below $1240
With the yellow metal breaking below the $1240 level for the first time since June, a close below this level targets $1225 and then towards $1198.
An oversold reading on the daily relative strength index could see a bounce, but the $1244 level should see some resistance, with a close above here looking towards $1253.
Silver decisively oversold
Silver remains firmly oversold today, testing levels not seen since June of last year. A close around $18.50 would then open the way to $17.95.
Any bounce must retake $19, but the 20-day moving average at $19.25 is also likely to provide resistance, as has been the case throughout the current downtrend from $21.50.
Brent supported by $98.80
If Brent doesn’t rally much from its current level then we will be looking at its lowest weekly close since July 2012. So far $98.80 is holding as support, and a close below this would target the 11 September low around $97.50.
WTI testing 20-DMA
The $91.90 level is firm support for the time being here, but once again the price is testing the 20-DMA. Previous attempts to clear this level have not been wildly successful, so the downside scenario still seems to prevail. A break through the moving average would point WTI towards $95.15.