Technical analysis: key levels for gold, silver and crude

The dance around $1320 in gold continues, while Brent crude’s dive is still ongoing this afternoon.

Barrels of oil
Source: Bloomberg

Gold bulls gathering strength?

The fact that buyers keep stepping in every time the price falls below $1320 indicates we may actually see further gains in gold. The first target remains $1330, and then $1333, but the price needs to break out from this $20 or so range before a clear move can be said to have established itself.

The 100-daily moving average $1304 could provide support if we do see a sustained move down, but for the moment it doesn’t appear that gold wants to go that way.

The move of the 50-DMA above the 200-DMA is telling, and would suggest the bull case is gathering momentum.

Silver see floor around $21

As gold progresses, so does silver. A floor has been built around $21, and so we now look to the $21.50 level and then $22 as near-term targets.

However, an apparent turn lower in the moving average convergence-divergence, and the continuing oversold condition of the commodity, suggests we will see more tight-range trading, mirroring recent sessions.

Thus, the order of the day remains quick entries and exits for those so inclined, with bears waiting for any solid close below the 20-DMA moving average before going short.

Brent crude falls through 50-DMA

Having fallen through the 50-DMA yesterday, support for Brent crude now falls to the 100-DMA or the nearby 200-DMA. Any drop through the 200-DMA would signal a fresh move towards $108, and then in the direction of $107 where buyers could be found in late April and early May.

Any turnaround would need to be built on top of the 50-DMA, currently at $110.41, but bulls would need to see a change in the relative strength index and other momentum indicators before this can happen.

US light crude awaits indicators

Short-term bounces in NYMEX today have been firmly sold, leaving us below the 50-DMA, but we would need to see a break of the uptrend line from early January before preparing for more losses. If it does continue to decline, then the $102 from the beginning of June would be a short-term target.

On the upside, a close above $104.40 would be needed, along with (ideally) a turnaround in the RSI and confirmation from other indicators. 

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