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.
Gold's RSI reading is bullish
The spike in gold prices has pushed them firmly above $1200 and on to the 50-day SMA at $1220. This is also a touch of the rising trendline from November that held up the price during its rally in Q4 of 2014.
For the time being the buyers are still in control. A close above the 100-day SMA would signal that another attempt to push on to the 50-DSMA was in the offing. Daily RSI and stochastic readings are still firmly bullish, although the former is on the cusp of breaking into overbought territory.
A close back below the 100-day SMA might signal the move upward has begun to come to an end, although only a close back below $1200 would really reverse the bullish momentum.
Silver could test 200-DSMA
Having smashed through the 50-DSMA silver has shown little sign of stopping, with the potential for a test of the 200-DSMA at $17.80 in the offing. With both the RSI and stochastics now overbought some caution is advised, with some resistance possible at $17.50.
A pullback to $16.80 may find some support, around the 50-DSMA, but a close below here would end the current move higher.
Brent looks to break above $60
Renewed concerns in the Middle East are diving oil higher, with Brent now attempting a break above $60. If the upward momentum is maintained then the 100-DSMA at $61.30 is a first target, followed on by $62.30, the high that acted as resistance throughout February.
With daily stochastics and the RSI pointing higher, there seems to be further upside coming through here, although a move back below the 50-DSMA would reverse this.
WTI eyes $51.90
For the time being a similar picture prevails in US light crude as well. The buyers seem to be in control, with the RSI and stochastics moving higher on the daily chart. However the month high at $51.90 has still to be taken out. If we do see a daily close above here then the 100-day SMA at $55.40 becomes a target, which would coincide nicely with the February highs.
As with Brent, a drop back below the 50-DMA would cancel out the bullish outlook.