Over 40 years’ heritage
185,800 clients worldwide
Over 15,000 markets

Levels to watch: gold, silver and crude

Markets are preparing for the release of the Federal Open Market Committee statement, which is likely to result in an uptick in volatility.

A mining truck
Source: Bloomberg

Gold remains in consolidation

Gold prices are continuing to consolidate around its previous highs, with a clear topside resistance level at $1,302 and a downside support level placed at $1,274.

The metal is currently trading at $1,288 and is likely to receive a flurry of activity today on the back of tonight’s release from the FOMC as well as the Federal funds rate, which is expected to be held at 0.25%. Both releases are scheduled for 7.00pm (London time).

The pullback in gold has tested the 200-hour moving average at $1,285, but has since received support, and if held could then point to a retest of resistance placed at $1,303. If this is taken out then a move towards $1,321 is likely. However, with a reading of 48 in its relative strength index, a further move to the downside may still be in play. This will need to break the 200-hour MA in order to confirm a bearish bias, and if achieved could lead to $1,274.

Silver backs tamely off its highs

Silver prices are trading at $18.02, down 0.26% on the day. With a backdrop of economic uncertainty and recent monetary stimulus from the European Central Bank, pressure has been mounting in regards to a possible rate hike form the Fed, which makes statements like todays particularly poignant.

Silver prices have retreated from the Tuesday high of $18.21, but price action still remains in an expansionary trend according to its RSI at 50.6. Should the 50-hour MA at $17.98 continue to act as support then a retest of the 100-hour at $18.12 is likely to come into play. However, if downside support fails then the next clear area of support is placed at $17.92.

Brent targeting further downside

Brent prices are trading at $48.82, down 0.91% on Wednesday after touching a recent high of $49.99 on Tuesday. The reversal back below a key area of resistance, at $49.19, is supported by its 100-hour MA at $48.78. A push past this could lead to a retest of previous downside support at $48.19. Although, should the aforementioned level hold, and a bullish trend is confirmed by a break above $49.19, then the next level of topside resistance is seen at $50.06.

WTI remains under pressure

WTI is trading at $45.19, down 0.64% as markets begin to position themselves ahead the FOMC statement in what is likely to be a volatile trading session.

WTI’s 100-hour MA has continued to act as topside resistance, currently trading at $45.91, and if this is held a retest of downside targets currently placed at $42.20 is likely. However, should price action push through resistance then the next clear level of topside resistance is at the 200-hour at $46.78.

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.