Levels to watch: gold, silver and crude

The softening dollar should be bullish for precious metals, but safe havens remain muted ahead of the Bank of England's interest rate decision.

Silver bars
Source: Bloomberg

Gold eyes $1,270

Gold prices are trading at $1,266, down 0.5% on Thursday ahead of the release of the BoE’s interest rate and quantitative easing decisions at 12pm (London time). Both are expected to remain unchanged at 0.25% and £375 billion respectively.

Gold has most recently dropped through its 50-hour moving average, currently trading at $1,267 which should now turn into topside resistance. This move is supported by a bearish reading of 43 which if sustained could see further downside targets of $1,251. However, should price action push back above gold’s 50-H MA then a retesting of its 100-hour level, at $1,270, could be brought into play.

Silver remains in bearish formation

Silver prices are trading at $17.30, losing 0.68% during Thursday’s London open session having touched an overnight high of $17.50. This was subsequently a lower-high, which could indicate a continuing bearish trend formation. To be confirmed we would need to see a break below its 100-hour moving average, at $17.26, which if achieved would then signal a move to $17.11.

However, should downside support at $17.26 hold then it’s likely that a retesting of topside resistance, at $17.54, is the next clear upside target.

Brent finds much needed support

Brent prices are trading at $54.63, up 0.02% during Thursday’s London open session having found downside support at the 100-H MA at $53.86.

Should downside support continue to hold then it’s likely that a retesting of Brent’s 200-H MA would be brought into play. However, Brent’s relative strength index continues to trade in a contractionary trend with a reading of 44.5. This suggests a bearish trend remains intact and could well see a retesting of downside support at $53.86.

WTI gains capped by 50- H MA

WTI prices added 0.59% on Thursday. It is currently trading at $48.94 with further upside being capped by its 50-hour moving average of $49.19. Should price action breach topside resistance then the next clear upside targets could well be seen at $51.28 and $53.16.

However, should topside resistance hold firm then it’s likely that a retesting of its overnight low of $47.39 will come back into play with downside support not being seen until $47.18. If broken, this could well lead the way to $46.72 – a move supported by a contractionary reading of 47 in its RSI. 

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