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 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.
Gold could fall below $1200
With the loss of $1215 it now looks increasingly likely that we will see gold push below $1200. Support is possible around $1190, with further support perhaps entering the frame around $1156.
Any rallies continue to be capped by likely resistance around $1222 and then the 20-day moving average at $1230. A small oversold reading on the daily relative strength index means we could see a move back towards $1215 before the next leg down commences.
Silver RSI still oversold
We have to look further and further back for possible support in silver prices, and while $17 is one potential area the magnitude of this downward move suggests most levels are there to be broken.
Should $17 be broken then the weekly chart suggests $16.70. The daily RSI continues to sit deep in oversold territory, but any bounce towards $17.50 is likely to be sold once again.
Brent's struggle continues
Brent’s abysmal day yesterday saw the $95.30 level broken and so we look towards $91.20 as an area where buyers may re-enter the picture, given that this level was major support in 2012.
An oversold bounce should carry us back towards $97.15, but then the next leg down is likely to commence, given the preponderance of supply.
50-DMA capping WTI upside
Yesterday’s slump shows that there were a number of sellers waiting to send the commodity back down once it neared the 50-DMA, and it certainly restores the downside scenario that had looked under pressure since last week.
If the lows around $90.90 are lost then we look to the weekly chart and then $90.35 area, followed up by $88.35. The 50-DMA at $95 still acts as the major barrier on the upside.