Levels to watch: gold, silver and crude

Gold continues to hold up but silver remains bearish, while oil tries to break through key resistance. 

Oil pipework refinery
Source: Bloomberg

Gold could target $1200

Although it has faltered around the 14-day EMA ($1184), there is still reason to expect fresh upside. Daily stochastics remain bullish, and so once the hourly stochastic turns higher and gives a bullish crossover, we can expect the metal to bounce. A first target is still $1190, and then to $1200.

The price has yet to seriously test the 200-hour SMA at $1182, but only a move back to $1175 would imperil the bullish outlook.

Silver eyes $16.20

Silver’s downside move is not over yet it seems, with a drop through $16 suggesting there is more to come. Fresh downside targets now lie in the direction of $15.60.

A bounce needs to clear yesterday’s high of $16.20, ideally coupled with a bullish crossover in daily stochastics to suggest a fresh move to the upside.

Brent could move back to 50-hour SMA

A steady rally in recent days reinforces the idea that we will see the price move back in the direction of the May high at $70. Thus we look to ‘buy on the dips’, with a move back to the 50-hour SMA at $65.60 being one possible entry point.

We have yet to have a fully oversold reading on daily stochastics however, so until that occurs in brent I would stand aside.

WTI could target early May high

The mark of $61.50 is providing some resistance, with the price at the top end of the trading range that has dominated for the past six weeks. A break above here would target the early May high $62.70 for WTI.

Support could be found at the rising 50-hour SMA at $60.65, with a bigger move lower testing the 200-hour MA at $59.69. 

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.