Levels to watch: gold, silver & crude

Precious metals are putting in some early gains this morning, but oil prices have remained becalmed so far in London, not helped by a decision by Goldman Sachs to cut oil price forecasts. 

Source: Bloomberg

Gold favours the bulls
Gold prices have hit levels not seen since mid-February, and the move through $1224 puts the emphasis on the bullish scenario. Should $1230 hold in coming sessions, the outlook will have shifted, with a move onwards to resistance at $1250 looking likely.

If this is broken then we would see $1300 as a possibility. On the downside $1215 is an area of potential support if the rally falters from here.

Silver looks to continue moving higher
Any continuation of the bullish momentum that we have seen in silver will raise the prospect of a test of the January high around $18.50. An overbought reading on the daily chart might give some pause for thought, but the push through $17.50 does suggest that the buyers are still in charge.

We have yet to see any retracement, and given that buyers stepped in to prevent any losses on Friday it seems that we will be moving higher in due course. A move back below the 200-day simple moving average at $17.02 would nullify this outlook.

Brent targets $68
As last week, $68 remains the level that brent crude must beat to ensure its rally continues on its way. So far the price has shown little inclination to challenge this level, but a bounce from the support zone around $64 indicates buying pressure is still in evidence.

Should $64 be lost then we look to the area around $63 for further potential support.

WTI aims to add to its gains
The signs still point to a continuation of light crude’s gains, even if $62 is still a stumbling block. The rising trend off the March lows is still intact, without any suggestion yet that a more sustained downturn is in the offing.

For now, we wait until the 14-day exponential moving average at $59.50 is breached, since this indicator has provided good support for the time being.

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