Levels to watch: gold, silver and crude

Commodity markets have quietened down, although with the European Central Bank meeting looming this may be the calm before the storm.

Liquid oil barrel being filled
Source: Bloomberg

Gold's rally in question

It seems gold can move above $1200 after all. It appears that $1195 is support for now, but we need to see a close above $1205 on a daily basis to get some real momentum into this asset class. The unwillingness of the price to break through the 50-day moving average is a warning that all may not be well in gold’s attempt to rally.

A drop back below the 200-hour moving average around $1195 certainly restores the bearish outlook, and it looks like gold will face stiff competition if it tries to break through $1220.

Silver could reach $17.50

Having moved up for three days, silver is aiming to clear $16.50. Success in this endeavour would lead it on to challenge $16.70, with a close above here opening the way to $17.50.

Meanwhile on the downside, $16.10 and $15.90 are potential support levels. So long as the price holds above the July downtrend line the picture looks to be marginally more on the bullish side.

Brent sellers have upper hand

The slip back below the 50-H MA means that Brent is now once again looking to challenge the lows around $68 seen at the beginning of the week. Yesterday’s peak around $73 has proved to be too much, and a declining hourly relative strength index shows that the sellers still have the upper hand here.

WTI could target $69.50

After Monday’s bounce US light crude is declining again, for a second consecutive day. For now $67 is holding up as support but if it is broken the dive to $64 could be swift.

For now the price shows little inclination to go above $67.90, but even a break through here would only target $69.50 in the first instance. 

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