Much hangs on the ECB today. If the bank does decide to go towards quantitative easing we could see gains for precious metals in the short term, while the rally in equities would likely carry over to the oil market.
Precious metals have recovered from the multi-week lows seen yesterday, but it seems unlikely that the long-term picture has changed significantly.
$1260 supporting gold
The $1260 zone continues to be support at present, but gold will need a close above $1273 to sustain its upward momentum.
A drop below $1260 would suggest another retest of the early June lows around $1240.
The daily relative strength index would also need to break its steady downtrend from the July highs.
Silver still oversold
With silver still looking oversold there is the potential for a bounce, but it seems the metal is unable to make progress above $19.20 for the time being. Meanwhile, $19.10 is holding as support, but a dip through here would raise the possibility that the June lows around $18.75 would be tested.
Brent could head higher
The substantial bounce in Brent yesterday has meant the commodity is trading close to the week’s highs and above the 20-day moving average once again.
We need to see a close above $103.10 for the upward momentum to continue, but a rising daily RSI does suggest this move does have the capacity to continue upwards.
WTI hits resistance
The $95.90 level is the major resistance for WTI at the moment, but with all momentum indicators turning higher the commodity looks healthier than it has for some time.
The $94.90 level could be immediate support, with the area around $94 itself being further support if the downside scenario gains momentum.