Gold could find support at 200-DMA
As we await the minutes of the most recent Federal Open Market Committee meeting, gold has retreated below the $1300/oz mark and is currently testing short-term support at $1293. The distinct lack of inflationary pressures, and the fact that quantitative easing is set to come to an end in October, is not helping to create a bid for gold presently.
Support at $1284 and the 200-day moving average may be the next move for the metal, with rising trendline support from the January lows at $1280 below that. Relative strength index is not oversold. Only a move through $1322 will allow the gold price to shake off the current phase and create an environment to allow a push towards the July highs at $1345.
Silver hopes to break above $19.80
The news is similar for silver which is testing the trendline resistance from the September 2013 highs, and is trading below all significant DMAs. A break through yesterday’s lows at $19.38 puts the price back towards $19.06. Resistance lies at $19.52, then $19.74, and while the RSI is looking oversold we may see some range-bound moves in the near-term.
The bearish channel from the July 10 highs indicates that only a break above $19.80 will allow silver to regain some poise.
Brent could push to $102.56
Yesterday’s doji candle on Brent presents the possibility of an upside correction. Given how far the price action has deviated from the 200-DMA, an upward spike towards the $102.56 level and even $103/bbl cannot be ruled out. The rising divergent RSI is also helping to make this scenario play out. This is only a possibility as long as $102/bbl holds firm.
A break through yesterday’s highs would see a move towards $102.65, while a break through the $103/bbl level would alleviate some of the recent downside pressures. Crude oil inventories are released at 3pm today (London time) – the forecast is for a decline of 1.3million barrels.