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 eyes close above $1220
The rising daily trend from the November lows has provided excellent support, coinciding with the $1200 level. A close above $1220 and the 100-day moving average, coupled with a breakout from the daily relative strength index’s descending trendline could signal the beginning of a new leg higher for gold, with an initial target of $1230 and then the 200-DMA.
A drop back will find support at $1200, with a drop through the November trendline targeting the area around $1180.
Silver holding above $16.50
Silver looks less appealing for the bulls, stuck below the 50- and 100-DMAs with the RSI still trending lower. For the moment the price is holding above $16.50, but a break lower targets first yesterday’s low at $16.30 and then on to the December/January lows around $15.50.
Any bounce higher will need to recover the rising trendline from the December lows that was broken earlier this week, and then move above the descending trend from the $18.50 peak seen in late January.
Brent’s rally waning
Brent crude finds itself at something of a crunch point. The 20-DMA is poised to cross above the 50-DMA for the first time since June, a bullish sign. However, the RSI has dropped through its 11 February low, while other momentum indicators point to the rally fading fast and a possible pullback in the offing.
The hourly trendline has been broken, marking a departure from the February uptrend, and although the hourly RSI is now oversold and thus hints at a bounce in the short term back towards $60, the rally in crude appears to have run its course. A firm bounce would need to clear the $63 area, the major resistance level from 17 February.
WTI supported by 20-DMA
US light crude has tested its rising uptrend from the January lows, but has moved back above it for the time being. A continuation of this bounce would target $52 and then the $54 level that halted progress throughout the month so far.
A dip lower targets $48 and then $46.80, although for the time being the 20-DMA has done well to act as support for the current move higher.