Levels to watch: gold, silver and crude

While precious metals mark time as they debate their next move, oil prices continue to feel the impact of bearish sentiment.

Silver bars
Source: Bloomberg

Gold eyes $1140

The metal continues to stabilise after its heavy losses, moving into consolidation mode. For the moment it is not clear whether this will resolve into a move up or down; I would regard a close back above $1110 as a bullish development, at least in the short-term, with a possible target back up towards $1140, the March lows.

If we resolve lower from the current range then the 24 July low at $1177 becomes the target, which would also encounter support from the monthly descending trendline around $1175. 

Silver could move above $15

Gold’s cheaper cousin however continues to be in a downtrend, even if buyers are still defending the $14.50 level with aplomb. Next support is to be found towards $14.40, the lows of 24 July, and then on towards $13.70.

The upside case would be invigorated by a move back above $15, but this would still leave it stuck in the longer-term downtrend, which would provide resistance around $15.35 for the metal

Brent could move to January lows

The break of $55 last week has intensified the downside here. Intraday rallies are becoming increasingly short-lived, but are still there to be sold. So far there is no sign of a turnaround here, and while there may be some support at $52.40, it looks like a move to the January lows is still on the cards for Brent.

Only a move back above $55 reverses this outlook.

WTI downside target around $45

For WTI, even the 20-hour EMA (currently $47.22) has been too much, with repeated attempts to move above this indicator defeated.

The move in this commodity has been a near-straight line, and downside targets still lie around $45 and below; only a bounce through and a close above the $50 level would stand even the remotest chance of providing a bullish catalyst, and even that would face the fundamental bearish drivers of rising supplies and weaker demand. 

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