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Levels to watch: gold, silver and crude

Commodity markets are likely to be relatively muted ahead of Wednesday’s Federal Open Market Committee statement. 

Oil pump

Gold await directional cue from FOMC

Gold prices are trading at $1,282.8, adding 0.21% on the day after continuing to fall from its January 22 high of $1,307 ahead of the FOMC statement – the result of which is likely to dictate the short-term directional bias in gold prices.

On Tuesday the yellow metal tested its downside support level which continues to trade at the 200-hour moving average at $1,279. Should the $1,287 level hold then a retest of the 100-hour MA at $1,287 is likely to be the next clear upside target – a move currently supported by gold’s relative strength index (RSI) at 51.19. However, should prices reverse through downside support then $1,270 is likely to come into the crosshairs.

Silver fails to maintain uptrend

Like gold silver prices – currently trading at $17.94 – tested downside support at its 50-hour MA of $17.79. As a result, prices have added 0.02% on the day but remain in contraction territory according to its RSI reading of 47. Should the 50-hour MA be retested and broken then the next clear downside target is at $17.70. An increase bullish momentum could see a topside target of $18.10 come into play.

Brent on the back foot ahead of inventory data

Brent prices, currently at $48.33, are up 0.17% ahead of the release of US inventory data which is expected to rise week on week to 5.70 million from 3.90 million, as the world’s largest producers refuse to curb production levels despite thin demand.

Prices continue to be suppressed by its 50-hour MA at $48.55 – an area that is likely to act as solid topside resistance and if held could see a retest of Monday’s low of $47.68. Further possible downside is also signalled by a reading of 47 in its RSI. However, if price action pushes through $48.55 then the next clear upside target is likely to be seen at $49.19.

WTI aiming to retest downside

WTI is currently trading at $45.09, down 0.14% after touching a daily high of $45.74 in a move that was capped by its 50-hour MA at $45.53 – an area that is likely to continue to act as topside resistance in a move supported by a contractionary reading of 44 in its RSI. Should a downside move prevail, the next clear level is placed at the recent low of $44.34 (January 25). However, a sustained move above the $45.43 level could bring the 100-hour MA at $46.34 into play. 

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