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Levels to watch: gold, silver and crude

A Greek deal does nothing to help precious metals, which are out of favour this morning, but oil isn’t joining in the general rally.

Gold bar
Source: Bloomberg

Gold RSI stuck in descending trend

The steady trend lower continues in gold, now down over $100 since its January peak. With the rising trendline off the November lows broken and the relative strength index yet to shake off its descending trend we are looking to the levels last seen at the beginning of 2015 around $1180.

A break below those would target $1170 and then on to $1145. Gold must manage a close back above $1200 and the rising trend to turn this around, but there is no sign yet that momentum indicators are pointing to such a development.

Silver eyes $16.50

It is a similar story for silver, and while the price might enjoy a brief respite around the $16 level it seems we are in for another test of the $15.50 lows from December and January, unless the bulls can manage a significant turnaround in coming days.

Upside targets lie in the region of $16.50 and then the 100-day moving average, but gains are likely to be constrained by the descending trendline off the January high at $18.50, which in this case enters the picture around $16.70.

Brent could target $62.50

The loss of momentum seen last week in Brent crude is still evident, as the daily RSI remains below its 10-DMA and the stochastic index stays in a bearish form.

A continuation of this move lower would take us toward last week’s low at $58. The rising trendline off the January lows has been lost once again, and while the 200-hour MA is providing some support in the short-term its loss will put the bears back in charge. The $62.50 level is still the upside target that must be attained if the rally in crude is to be extended.

WTI could find support at $48

US light crude looks in a worse position, being much closer to last Thursday’s lows around $50. A drop through here opens the way to $49 and then the big support level of $48, around which buyers stepped in during the early part of February.

For the time being the rising 20-DMA will also provide some support, but the rolling over of the RSI and SMI after steady moves higher still leaves the emphasis on the downside. 

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