Levels to watch: gold, silver and crude

USD weakness spurs buying activity in gold, while oil bears remain heavily short.

Oil poured into a drum
Source: Bloomberg

Gold bulls back on track

Gold prices have added +0.51% having rallied off a short-term low of $1,179 to its current level of $1,188 on Tuesday, taking out Monday’s topside area of resistance level of $1,186 – a level which should now become an area of support in search of a move higher to $1,192.2. This is supported by a move into expansionary territory in gold’s relative strength index, which is currently at 51.3. Should expectations for a move higher to 93.2 in the US consumer confidence data be missed, then further upside in gold could be seen.

Silver remains muted

A continuation in the consolidation of silver prices has continued into Tuesday – albeit seeing a lower high posted at $15.73 on Monday. This could signal a possible breaking of topside resistance at $16.15, in which a close above the aforementioned level would need to be seen as confirmation of a bullish pattern. If this is achieved we could see $16.29 taken out.

Brent bears continue to add downside pressure

Brent prices broke sharply to the downside overnight, touching a low of $56.73 before retracing back up to its current level of $57.29. The move saw Monday’s intermediate downside level of $57.67 taken out, which should now become support in search of further downside. If that level is held then the next clear downside target is likely to be seen at $56.

WTI breaks long-term key support

WTI also broke down through key support at $53.96, which should also now become an area of resistance. Prices are currently trading at $53.26, and if the intermediate topside target of $53.96 is held then a possible move lower to a multi-year low of $52 could well be seen. 

The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication.