Levels to watch: gold, silver and crude

The excitement of China cutting rates has seen commodities livened up, with gold making another stab at breaking $1200 while oil pushes through to new highs for the week.

Gold bars
Source: Bloomberg

Gold tests $1200

Gold's tests of $1200 have been like the proverbial London buses – you wait ages for one and then two come along at once. That has been the experience of traders this morning, although the metal is showing a distinct reluctance to go much higher.

First targets on the upside are $1202 and $1204, followed by $1217, while a drop back first heads towards $1180, then the 200-hour at $1177 and then the crucial $1154 level.

Silver breaks through July downtrend

It seems remarkable to say it but silver has finally broken through the July downtrend, if only on the hourly chart. We need to see a close above this line for further gains in the direction of the week’s high at $16.50.

An inability to hold on to this move would still target the area around $16 and the 200-hour at $15.95, followed by a possible dive to the lows of last Friday at $15.35.

Brent hits week-highs

Oil prices are enjoying a good day, and Brent is hitting levels not seen in over a week. A close above $80 would suggest a continuation towards $83, and then even $85. Meanwhile, a failure to hold above $80 means we could be on course for further declines towards $76.75, as the commodity returns to its oversold status.

WTI pushes through 200-hour MA

US light has pushed through the 200-hour MA for the first time in almost two weeks. Having moved above the highs of this week we now look for it to sustain a move towards $78, although some pullback may be in order now that the price is overbought on an intraday chart.

First support may be found at $75.70, and then $75.30, around the 200- and then 50-hour moving averages respectively.

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