Technical analysis: key levels for gold, silver & crude

Upward progress in commodities is noticeably absent this morning, as the week starts on a quiet note for the asset class.

Source: Bloomberg

Gold looking bullish
The metal has so far failed to move beyond the $1209/$1210 area, although the uptrend off the March lows is still intact, with possible support entering around $1198. Relative strength index (RSI) and stochastics on the daily time frame have turned cautiously bullish, although the latter has yet to give a fully-fledged bullish crossover. The main upside target is still $1220, with $1190 providing support should the uptrend line be broken.

Silver struggles to break 100-SMA
Silver, however, looks less encouraging for the bulls, trapped as it is below the 100-simple moving average (SMA) at $16.29. For now $16.20 has provided good support, as has been the case since 9 April, but a break below here would target $16 and then $15.40. So far downward progress has been lacking – but upward movement has been no more plentiful. A break about the 100-SMA at $16.60 would head towards the $17 that has been so crucial over the past month.

Brent rally looks to falter
The rally here has begun to stall, with the price still unable to stage a daily close above $65. For the moment, it looks like Brent crude remains a ‘buy on the dips’ market, especially if we see weakness towards $62. However at present momentum must be maintained beyond $65 for the rally to continue for any extended period.

WTI may have stalled
It would be unwise to suggest the rally in US light crude has run its course, but progress above $58 has been lacking in recent sessions. An overbought reading on the daily RSI is one source for concern, but while the price remains above the 14-day exponential moving average ($53.74), dips on the four-hour chart towards $56.80 may still be bought. 

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