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Levels to watch: gold, silver and crude

Gold and silver are at a crucial support level that will determine direction for coming week, while crude pulls back following the spike earlier this month.

Silver bars
Source: Bloomberg

Gold retests $1178 following brief foray below the major support level

Gold’s move below $1178 was short-lived, with Wednesday’s trading seeing that level taken back in a strong move higher. However, we have now returned to that same level and the crucial issue is whether it will hold. With that in mind, I am hoping for a bounce higher towards $1193 and $1200.

However, a move below $1178 would likely bring a swift move towards $1163 and most probably lower. With that in mind, I see the current price level as a good opportunity given the fact that any bullish sentiment can quite easily be wiped out with a move below the $1178 area. With trendline support also coming into play around that area, I do expect a bounce higher.

Gold chart

Silver at bottom of triangle which could mark bottom of selloff

Silver has been selling off strongly over recent weeks. However, with price currently at the bottom of the symmetrical triangle I could see a bounce higher today. The past three days have seen a gravestone doji, inverse hammer and a standard doji, indicating significant indecision in the markets.

Given that we are at such a major support level, coupled with a MACD histogram that appears to be in an upward trajectory and a bullish cross in the stochastic, I could see the current price as marking the bottom for silver. Ultimately, if price holds up above yesterday’s low of $15.83, then I am bullish for a move towards the $16.56 region. However a break below $15.83 would point to a more protracted move lower in both gold and silver.   

Silver chart

Brent turning over following spike to resistance

The major move higher in Brent appears to be over for now, with the $66.88 level having held up as resistance in the near-term. The damage has been done now, with the move above $65.84 representing a new higher high and thus the bearish picture is beginning to look a little less convincing over the medium-term.

However, I could see us continue to move lower for the time being, to take back some of the gains we have seen over the past week or so. While the likes of the stochastic is now within oversold territory, we continue to see lower lows and lower highs on the intraday markets and thus as long as price remains below $65.84, I expect to see further losses.

Brent crude chart

WTI resistance zone holds up for move lower

The picture is clearer for WTI, with the triangle resistance zone having held up and we are now seeing the bears come back into play. A similar picture as Brent, where the momentum indicators are pointing towards this move lower running out of steam.

However, until we create a new higher high, I continue to look for a move lower to retrace the substantial gains seen earlier this month.

WTI chart

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