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 locked in by 200-hour SMA
The brief bounce in gold last week has run its course, it appears, with fresh downside now on the way. The commodity has been a prisoner of the 200-hour simple moving average ($1164) for a number of sessions, failing to break above this indicator, with today being no exception.
At present I am watching the lows of 8 July around $1150, with a break below here opening the way to fresh downside in the direction of $1148. I would remain of a bearish disposition unless and until the metal breaks through the 6 July highs around $1175.
Silver facing similar battle as gold
Silver is facing its own battle with the 200-hour SMA ($15.50), having fallen back below it despite a spike over the course of the weekend.
The bounce off the lows of $15 last week continues, with a target of $16 looking doable at present. A move above here would see the metal testing the 200-day SMA ($16.50) once again.
Brent looks ready to slump
Having bounced during the past week Brent crude now looks poised for a move lower. $59.80 continues to act as resistance and will be the litmus test for any rally, but ultimately a move higher here still needs to clear the 100-day SMA at $61.66. A test of the $56 area should be watched in coming days, with a break of this area heading towards $52.50.
US light crude's rally of last week has run its course, with gains petering out around $53/barrel. With Iran and Libya news on the schedule for this week bearish momentum may develop and see the commodity test the lows around $50.60.
With the daily relative strength index still bearish and stochastics rolling over once again it looks like the downside in crude is here to stay.