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Levels to watch: gold, silver and crude

Precious metals claw back losses ahead of an expected fall in US factory orders.

Gold bars
Source: Bloomberg

Gold supported ahead of US economic data

Gold prices are trading at $1,282, adding 0.64% on Tuesday having touched a recent low of $1,266 on Monday. This has since seen price action rally through key resistance at its 200-hour moving average ($1,281), which if held could see a move higher to $1,292. However, should the $1,281 level fail to hold, a re-testing of the 100-hour moving average which is currently trading at $1,275 could be brought into play. US factory orders data, released today, is expected to come in at -2.2% down from its previous level of -0.7% month-on-month. If achieved, this is likely to support a move higher in prices.

Silver powers higher

Silver prices are trading at $17.67, adding 2.71% on Tuesday, rallying off an overnight low of $17.00. This has subsequently seen a re-testing of its 200-hour moving average, currently trading at $17.76. Should topside resistance at the 200-moving average fail to hold, then the next clear upside target is likely to be seen at $17.89. However, given the sharp move higher, silver is currently signalling an overbought signal of 77 in its relative strength index suggesting a possible pullback could be imminent. This could trigger a short-term pullback to re-test silver’s 100-day moving average, currently trading at $17.38.

Brent continues to find support

Brent prices are trading at $56.49, adding 2.98% on Tuesday as supply fears emanating from ongoing strikes across oil refineries in the US, coupled with a short-squeeze, continue to push prices higher. This has resulted in an overbought level of 74.3, according to Brent’s RSI, which coincides with a testing of key topside resistance at $56.41. If this level holds, we could see a pullback to $55.38-54.70. However, a sustained break above $56.41 could result in a move higher to $57.41.

Overbought WTI could see short-term pullback

WTI has added 1.22%, currently trading at $51.00 having touched a high of $51.28. This coincides with key topside resistance, which if held could see a re-testing of previous downside support levels following a move into overbought territory, according to its RSI which is currently trading at 74. Downside levels to watch are currently placed at $49.39, which if broken could lead the way to $48.76. However, should the current bullish run be sustained and a breaking of topside resistance of $51.28 be seen, the next clear upside level is likely to be placed at $53.16. 

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