Levels to watch: gold, silver and crude

Profit-taking is likely to be driving pullbacks as global growth fundamentals remain weak.

Oil barrels
Source: Bloomberg

Overbought gold re-testing lower levels

Gold prices are down 1% having posted a high of $1,307.6 on Friday, coinciding with an overbought reading in the pair’s relative strength index. This resulted in a pullback to its current level of $1,283, which is now likely to re-test a previous area of support at $1,274. Should downside support fail to hold then the next area to be tested is its 200-hour moving average, currently trading at $1,274. However, should downside support hold, a re-testing of upside resistance is likely to be seen at $1,302.

Silver upside capped by 200-DMA

Silver is down 2% on Monday having failed to sustain a move above the 200-day moving average ($1,819), which has since seen price action break down through its 50- and 100-hour moving average. The latter is likely to act as an area of topside resistance, which if held could see $17.70 come back into play. However, the recent turnaround has resulted in an oversold reading of 28 in its RSI, which suggests that a short-term pullback is likely to be seen, which could see a re-testing of $1,815.

Brent under pressure once again

Brent prices continue to be hampered by an unwillingness of key players to curb production levels at a time of scant demand. Brent is trading at $48.08 on Monday, dipping below long-term support of $48.19, which if now turning into resistance could well see a move lower to the next key technical level of $45.21 – a move supported by its 50-, 100- and 200-hour moving averages. However, should a move below $48.19 fail to be sustained then $48.77 – a level which has seen both the 100- and 200-hour moving averages converge, is likely to become the next upside target.

WTI double-bottom looking to be re-tested

WTI prices re-tested downside support at $44.35 for a second time on Monday, which has once again seen price action bounce higher to its current level of $45.05. This could see a further move higher toward its 50-hour moving average, currently trading at $46.72. However, the recent reversal remains in contractionary territory at 37 in its RSI, which could signal a possible re-testing of downside support at $44.35. If broken at the third time of asking, this could see a targeting of $43.30.

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