Gold could drop through $1150
Gold opened lower this morning but it appears that there was no desire to see it remain around the $1150 level. Instead it has shot higher, right back to $1180 which is now potential resistance.
A close above $1180 puts the metal back on course for another attempt for the $1200 area, which it so signally failed to break last week. Meanwhile, a failure to clear $1180 means that the downside scenario still predominates and would result in another attempt at breaking through the $1150 area.
Silver could challenge $15.35
Silver’s move has been even more dramatic, but having fallen below the July trendline once again on Friday, it proved unable to move above it during this morning’s bounce.
Further declines today may challenge the $15.35 area, followed by the $14.80.
Brent could find support around $60.20
Now that the OPEC meeting is out of the way, oil may enjoy a short-term bounce as shorts close out their positions. The $70 level may be the real acid test – it marked the low of 2010 on weekly charts, and a close back above $70 could mark the beginning of a bounce, perhaps towards $74.40.
Conversely, the downside scenario below $70 points to possible support around $60.20, and given the magnitude of declines we have seen this doesn’t sound too far-fetched.
WTI lacking support
US light looks dangerously lacking in support on a weekly chart above $60, but a sharply oversold reading in the same timeframe supports the idea that there may be a short-term bounce.
To go to the other extreme, the hourly chart shows how bounces from oversold conditions have been short-lived. A move higher today suggests we might see the price fill the gap created this morning at $66, before moving back in the direction of today’s low at $64.