Levels to watch: gold, silver and crude

Precious metals claw back losses ahead of an expected fall in US factory orders.

Gold bars
Source: Bloomberg

Gold supported ahead of US economic data

Gold prices are trading at $1,282, adding 0.64% on Tuesday having touched a recent low of $1,266 on Monday. This has since seen price action rally through key resistance at its 200-hour moving average ($1,281), which if held could see a move higher to $1,292. However, should the $1,281 level fail to hold, a re-testing of the 100-hour moving average which is currently trading at $1,275 could be brought into play. US factory orders data, released today, is expected to come in at -2.2% down from its previous level of -0.7% month-on-month. If achieved, this is likely to support a move higher in prices.

Silver powers higher

Silver prices are trading at $17.67, adding 2.71% on Tuesday, rallying off an overnight low of $17.00. This has subsequently seen a re-testing of its 200-hour moving average, currently trading at $17.76. Should topside resistance at the 200-moving average fail to hold, then the next clear upside target is likely to be seen at $17.89. However, given the sharp move higher, silver is currently signalling an overbought signal of 77 in its relative strength index suggesting a possible pullback could be imminent. This could trigger a short-term pullback to re-test silver’s 100-day moving average, currently trading at $17.38.

Brent continues to find support

Brent prices are trading at $56.49, adding 2.98% on Tuesday as supply fears emanating from ongoing strikes across oil refineries in the US, coupled with a short-squeeze, continue to push prices higher. This has resulted in an overbought level of 74.3, according to Brent’s RSI, which coincides with a testing of key topside resistance at $56.41. If this level holds, we could see a pullback to $55.38-54.70. However, a sustained break above $56.41 could result in a move higher to $57.41.

Overbought WTI could see short-term pullback

WTI has added 1.22%, currently trading at $51.00 having touched a high of $51.28. This coincides with key topside resistance, which if held could see a re-testing of previous downside support levels following a move into overbought territory, according to its RSI which is currently trading at 74. Downside levels to watch are currently placed at $49.39, which if broken could lead the way to $48.76. However, should the current bullish run be sustained and a breaking of topside resistance of $51.28 be seen, the next clear upside level is likely to be placed at $53.16. 

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.