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 could look to support at $1180
A close below $1200 could well be regarded as the turning point for the current rally in gold. Impressively, the metal went all the way to $1220 on Thursday, hitting the November uptrend line from below. Now however we can see the daily relative strength index (RSI) beginning to roll over, dropping back from yesterday’s highs, a sign that buying momentum is receding.
Although the stochastic momentum index is still in a bullish frame, a serious decline today would bring this into question and potentially indicate that a reversal is underway. In that case we look towards support at $1180 and then $1160.
Silver RSI leaves overbought zone
Unsurprisingly a similar picture is playing out in silver, where an attempt to move towards $17.50 was rebuffed yesterday.
A close back below $17 would continue the reversal, and as the daily RSI drops out of overbought territory and threatens to move below its 10-day simple moving average the bears seem to be gaining control. On the downside $16.60 is possible support, while the price must close above $17.10 to maintain the upward move.
Brent buyers still in control
Brent crude is in retreat today as news of Saudi airstrikes fades in importance for a time, but with steady-rising momentum indicators still pointing to more gains the buyers seem to have the upper hand, with the February highs around $62.60 now in focus.
It would take a firm close below yesterday’s lows around $56.40 to signal that the upward move has come to an end.
WTI eyes $51.80 level
An attempt to take out yesterday’s highs failed, which casts doubt on the ability of US light crude to move higher. However the momentum still lies to the upside, so another move upwards to try for a close above $51.80 cannot be ruled out. On the four-hour chart a rising trendline from the 17 March lows could see support enter around the $48.40 mark.