Levels to watch: gold, silver and crude

USD regains support, which has pushed commodities onto the back foot.

Gold bars
Source: Bloomberg

Resurgent USD weighs on gold prices

The US dollar has regained some strength following Tuesday’s weak performance, which has since seen gold prices come off the recent high of $1,210 to its current level of $1,1987. Downside support presents itself just below its current trading price at $1,197.1 – which has already seen a break below, but with no close below as yet one can assume it’s still an area of support. Should $1,197 hold then a retest of its upside resistance at $1,200-1,204 could be brought back into play.

Silver aiming for a breakout

Silver prices broke through its upside band of consolidation on Tuesday at $16.29. It then went on to rally up to its recent high of $16.47 before retracing back through support to its current level of $16.18, trading marginally higher from its downside support level of $16.15. Should support hold at $16.15 then a retest of the $16.29-16.38 region may be seen. However, if a close sub-$16.15 is seen then the next area of downside resistance appears to be at $16.07.

Brent posts fresh multi-year low

Brent has moved higher off its multi-year lows of $56.26, currently trading at $56.46 with possible downside targets of $55.90. However, with the current move entering oversold territory on an hourly timeframe, it’s likely that a short-term pullback will be seen. It could then re-test the $56.74 level before resuming the previous bearish trend.

WTI fails to break support

WTI rallied into support overnight, touching a high of $54.33, but given price action failed to post a close above the $53.96 level it remains a bearish set-up, with downside targets at $52.96 should the aforementioned support level hold. 

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.