Levels to watch: gold, silver and crude

Oil markets have rallied once more, while base metals are in the ascendant again. Gold and silver, however, have been left behind.

Gold bars
Source: Bloomberg

A Ukraine ceasefire and more hope relating to Greece and a potential deal next Monday (despite the failure of the talks last night) is lifting markets across the board. Commodities have not been immune, with some strength in oil after a number of weaker sessions, but gold has failed to make much headway off the lows seen yesterday.

Gold finds support at 100-DMA

Having slumped through the 50-day moving average yesterday, the 100-DMA is now providing the index with some short-term support. A break through here would mean that we are looking at another test of the rising trend off the November lows, with a dip in the direction of the $1200 area.

The relative strength index and other momentum indicators have yet to be shaken out of the steady downtrends that both have exhibited since the January peak around $1300, so longs should stay their hand until some form of bottom has been seen.

Any rally to the upside is likely to be contained by the 200-DMA and then the top end of the current descending channel around $1260.

Silver could drop to $15.50

Silver continues to bounce along its own rising trendline from the December low, with no energy to break through the $17 level. A bounce would carry the price back towards the February high of $17.50, with a close above here pointing towards the $18.50 area.

A firm daily close off the rising trend would prompt a drop towards the $15.50 zone, the lows of December.

Brent struggles to move on

Despite a gain so far in the session today, we are still looking at potential rejection of the attempt to break above the current descending trendline.

So far the price is struggling to move much above $57.50, and a close below the trend, combined with a drop back below the 50-DMA, would restore the bearish outlook.

Only a close back above the high from Tuesday’s session would hand the momentum back to the bulls.

WTI RSI points for downside activity

US light crude failed to break the 50-DMA this week, although it was not for want of trying. Instead, we are seeing the RSI and stochastic momentum index pointing towards further moves on the downside.

A drop back would take us in the direction of the lows from January around $45. Those hoping for a continuation of the bounce will want to see the price move back through $53, with a first target of the $57.70 area.

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