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Levels to watch: gold, silver and crude

Commodities remain unloved this morning, despite a general outbreak of risk appetite for equity markets. 

Oil plant
Source: Bloomberg

Gold buyers wait for RSI to break downtrend

Yesterday saw gold take a tumble on changing expectations regarding the outlook for Federal Reserve monetary policy.

The rising trendline that supported the index over the past week has been lost, as the price dives through the 100-day moving average and heads in the direction of rising support off the November lows. A bounce here would then target $1220, but a drop below it signals a test of the $1180 zone.

The daily relative strength index has yet to break its own downtrend, so technical buyers will likely wait until this situation has changed.

Silver could test $15.90

As gold goes, so does silver, only in a more dramatic fashion. Yesterday’s 5% slump saw the metal hit its lowest level since 10 January. The area around $16.50 may stem the decline, but a further decline could signal a test of $15.90 and then $15.50.

Any rally is likely to run into resistance around the $17.20 zone, hitting the bearish trendline off the January highs.

Brent could dip towards 200-H MA

Moves above $62 have been knocked back so far, and we are seeing further weakness this morning. A drop through the $60.70 level would imply another dip towards the 200-hour MA and the rising trendline. A bounce from there would signal a continuation of the index's trend. Below the 200-H MA would be the $56 low from 11-12 February.

The upside target remains a close above $62, which would signify a fresh upward leg is commencing.

Janurary peak could provide resistance for WTI 

Price action yesterday witnessed a powerful bounce off the 200-H MA, but US light crude is still struggling to break through the $54 zone on a daily close basis. Even a close above here would still result in resistance being found at $55, the January peak.

More meaningful pullbacks could find support around the 20-DMA, and then around $48.90. 

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