Technical analysis: key levels for gold, silver and crude

The commodities outlook seems gloomy, with gold and silver still losing ground, while oil prices are becalmed around current levels.

Gold bars
Source: Bloomberg

Gold’s upside looks limited

Yet again we wait to see whether the $1307 level will prove too much for gold today. Until we see a break through here, and then beyond the 20-day moving average, the upside seems severely limited. Even then, a rally would run into resistance around $1320 and then $1340.

Any move upwards would need to be supported by a move in the daily relative strength index above the 50 level to suggest further upside. Meanwhile on the downside, the 100-DMA at $1301 is limiting losses, and even a drop through here would potentially be contained by the 50-DMA and $1294.

Silver continues to suffer

Silver continues to lose ground and on the hourly chart the picture is starting to look grim. The 200-hour MA has acted as a means of capping gains this morning, and a drop back in the intraday RSI from near overbought levels is signaling that we may see another test of yesterday’s lows around $20.50.

The 200-DMA has served well as support over the past week, and as I pointed out yesterday, the 50-DMA may well be about to crossover the 200-DMA which is the best hope for those looking for further gains. However, the negative divergence in the daily moving average convergence/divergence and RSI, signals that any move upwards will not be easy.

Brent stuck between $107 and $108

Yet again we seem condemned to watch Brent oscillate between $107 and $108, with little sign of gains on the upside despite clear positive divergence for the RSI, MACD and stochastics.

Until $108 is broken the upside here remains limited, as does the downside so long as the $107 area acts as major support. Again, Brent may be playing the waiting game until major data from the US emerges later in the week.

NYMEX finds support at June 2012 lows

NYMEX continues to find support along the long-term weekly trendline from the June 2012 lows. However, the drop below the 100-DMA and $102 suggests that further price action on an intraday basis back towards $100 is likely.

Ultimately only a real move back through the 20-DMA is going to signal that more gains are possible. In the meantime the drift lower will continue, with the 200-DMA only a short distance away around $99.77.

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