Levels to watch: gold, silver & crude

Precious metals are in retreat, while oil prices have lost their bullish momentum. 

Gold bars
Source: Bloomberg

Gold slips lower once more
The swift drop in gold this morning clears the way for a potential test of the $1150 level, which still hovers in the background as a promising support level. Daily stochastics have yet to turn bearish, but the relative strength index has slipped lower again, indicating that buying momentum has evaporated. With the price now stuck below all three major moving averages I remain with the view that more downside is likely. A close above the $1200 level would be needed to even suggest that the bulls are back in command.

Silver offers few opportunities for bulls
Silver is probing the lows seen last week, with a move below $15.80 targeting the March lows of $15.50. An oversold reading on the daily charts means sellers should be careful and wait for bounces on intraday charts. Until we get a move back through $16.20 there are likely to be only slim pickings for bulls.

Brent experiences heavy sell off
Brent crude has already sold off heavily this morning, so bears should wait for an intraday bounce. With the 50-day simple moving average at $63.50 being tested and daily stochastics rolling over and poised to go bearish it looks like the 100-day SMA at $60.63 may be in play sooner than anyone suspected. A bounce needs to hold above the 50-day SMA and then head towards $68.

One thing is becoming clear at this point – US light crude continues to find the air above $60 high uncongenial. Once again we have fallen back below the $60 mark. While the 14-day exponential moving average at $59.15 is providing some support the real hope for the bulls lies in the still-rising 50-day SMA at $58.23.

A break below here risks a drop to the 100-day SMA at $53.68, but a bounce will need to clear the 200-day SMA at $62.84 to be in with a chance of moving onwards. 

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