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.
Gold hits four-year low
Gold has been in a downward trend since the high of $1339 reached in July, with the selloff accelerated by the finishing of quantitative easing from the Federal Reserve last month. Overnight the metal fell to a fresh four-year low of $1132, triggered by a strong US dollar following Mario Draghi’s speech. It has recouped some of the losses since then but traders will be cautious ahead of the non-farm payrolls report.
The 100-hour moving average of $1155 is the initial target on the upside, and the next level to watch will be $1160; beyond that $1180. The relative strength index (one-hour chart) is telling us that the metal is out of oversold territory for now. If we drop below $1140 again, $1130 will be on the radar, with support possibly coming in at $1105.
Silver makes slight recovery
Silver has made a slight recovery, and is currently being supported by the 50-hour MA at $15.36. The near target is $15.68 and then on to $16.00. To stand any chance of snapping out of its downward trend it would need to confidently clear $16.25. On the downside, $15.20 is the initial target; if the overnight low of $15.06 is taken out then $15.00 will be in focus.
Brent eyes $83
Brent is edging higher this morning – it has moved above the 50-hour MA of $82.72 and is now eyeing $83. The next level up is $84 and then onto $84.45. Brent has made several attempts on $82 but can’t seem to puncture it. If the level is breached, traders will be looking to $81. Support will kick in at $80.
WTI downward trend running out of steam
Looking at WTI, the convergence of the 50-hour and 100-hour MA at $78.13 may suggest the longer-term downward move is running out of steam. A short-term change in sentiment could see WTI go to $79, and then the psychologically important $80 will be the one to watch. Beyond that, $82 will be in the cross hairs. To the downside, $77 will be in focus. If the recent low of $76.24 is reached, then $76 will be in sight.