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Commodities report: gold, silver and crude

Precious metals consolidate today, while the crude spike on Friday brings us to crucial resistance levels.

Gold bars
Source: Bloomberg

The increasing doubts of Federal Reserve action in 2015 have weakened the US dollar significantly, leading to a period of recovery across many of the US denominated commodities. 

Gold could see $1178

Gold bulls have been well and truly in control throughout October, as dollar weakness continues to drive the price higher. However, price now approaches a key resistance level at $1170 which represents the August peak. Given how notable this level is, I would expect some form of response.

However, we have seen gold take out a number of notable levels relatively easily and thus I would not be surprised to see a break.

For now, I await the response to $1170, where a close above this level would indicate a possible move towards $1178, which is the next major level of resistance. However, be aware of any bearish reversal signals below $1178 for some form of retracement.

Gold chart

Silver eyes $16.15

Silver is moving higher once more despite having pulled back from clear resistance at a 15-month trendline, coupled with the 200-day SMA.

A move above both these crucial resistance levels would be particularly bullish and thus I am looking out for a break back above $16.13 to spark a possible move towards $16.45.

The $15.60 mark formed the double-bottom neckline, which is broken and thus provides us with a projected target of $17.25. I expect us to see silver move higher from here and believe a break above $16.15 would be the spark needed to set silver back onto its recent upward path.

Silver chart

Brent crude turning lower

Unlike WTI, Brent has failed to retake the early September peak ($54.31) and is instead turning lower.

The inability to create a new high is certainly worrying and should we see a move back below $52.24, it would bring expectations of further losses. Any bullish sentiment would only return upon breaking above $54.31.

Until that happens, I am watching out for a break below $52.24, which would bring about expectations of a move lower, where support levels of $51.25 and $50.30 come into play.

Brent crude chart

WTI resistance could target $54

The break above $49.32 for WTI certainly brings about a more bullish picture, yet the case still remains that we have a lower high in play and as such a break back below $49.32 would bring about bearish connotations. Especially given that this represents the crucial resistance level that we have been watching last week.

For now, I am relatively bullish as long as price remains above $49.32, yet a break below could turn the outlook on its head and bring us back into the $43-49 range that has been in play.

I would only become strongly bullish should Brent also join WTI above the September high, yet treating WTI alone, I believe it looks bullish unless price moves below $49.32.

Support levels below would be $48.50 and $47.80, while resistance levels to watch are at $50.60 and $54.

WTI chart

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