Levels to watch: gold, silver and crude

Talk of higher US rates has hit gold and silver hard, while oil prices have not been immune either.

Gold bars
Source: Bloomberg

Gold eyes possible $1180

Gold turned firmly bearish on Friday, but with the daily relative strength index oversold once again the possibility of a short-term bounce is now high. If the price can hold above $1170 today then we are looking at a possible test of resistance around $1180.

However, with a US rate hike now more of a ‘sure thing’ (to borrow a phrase) we should expect gold to drop yet further, with sellers waiting a move out of oversold territory on the daily chart before entering.

The four-hour chart is sharply oversold as well, and stochastics in this time frame have staged a bullish crossover. A rally back towards the 20-period EMA at $1190 and then a fresh bearish crossover would provide a more appropriate area for entry than chasing the price at its current level.

Silver could find resistance at 50-DMA

A similar pattern applies here for silver. A slight rally today towards resistance at $16.20 would work off the overbought condition on the daily chart and bring us closer to the downtrend line from the January high.

The price has rallied sharply when using the hourly chart, with the 50-day moving average providing a potential area of resistance. Downside targets lie around $15.80 and then $15.50.

Brent hit by dollar's fortune

A rise in the US dollar has hit commodities across the board, with oil affected too. The price of Brent has dropped through the 20-DMA, while the daily RSI and stochastic indicators have both turned negative. Significant support in recent days has been found around the $58 level, while a break through here would take us back to the lows of 11 February at $56.

The hourly chart has turned firmly bearish, with the price back below all three major moving averages and the $59.50 area that was support in the first week of March. The $62.50 mark remains the target on the upside if a rally begins from here.

WTI sellers on top

US light crude is struggling to hold above the 50-DMA this morning, and a close below here would target $47.80 and then the lows of January around $44. Resistance lies around $51 and then $52.30, but with the 200-hour MA broken and the 50-hour moving rapidly lower as well the sellers seem to have the upper hand. 

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