Levels to watch: gold, silver and crude

Commodities to take their cue from key announcements by UK and US central banks.

Crude oil processor
Source: Bloomberg

Gold trapped in a range

Gold remains in a range between $1,196-$1,199 which has historically been an area of consolidation. However, this defined range now offers traders clear support/resistance levels ahead of today’s releases of both the UK and US central bank figures. Whatever the sentiment from both reports, gold is likely to trade with increased activity throughout Wednesday’s session.

Immediate risk ranges for gold are at $1,196 to the downside, which if a close is seen could lead to a re-testing of the recent low of $1,187. However, topside resistance is trading at $1,199 and should a break above be seen then the next clear area of resistance is likely to be $1,204-$1,208.

Silver attempting to recover from sharp fall

Silver prices fell sharply on Tuesday from a high of $16.65 to a low of $15.53. It has since rallied to its current level of $15.84. Similarly to gold, the directional bias of silver will take its cue from the US Federal Open Market Committee and the UK’s Monetary Policy Committee releases.

Immediate risk ranges in silver are at $15.67 to the downside, which has already been tested and confirmed as resistance. If it continues to hold we could see topside targets of $16.03-16.17 be tested.

Short-term bounce in Brent

Brent prices failed to break through Tuesday’s intermediate low range of $57.67 which remains intact heading into Wednesday’s session. Any discussion of deflation from either the US FOMC or the UK’s MPC in the Wednesday releases could see further downside in Brent testing this intermediate low.

However, should Brent’s price pullback it’s likely to target $63.53 before resuming the overriding bearish theme.

WTI pullback to continue

WTI prices tested Tuesday’s intermediate low range at $53.96 printing a daily low of $53.60 before seeing a pullback to its current level of $55.36. With a failure to post a close sub-$53.96 it’s likely this will act as an intermediate area of support with the topside short-term target of $59.89.

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