Levels to watch: gold, silver and crude

Commodities spiked higher yesterday, yet with major support up ahead, how long will it last?

Source: Bloomberg

Gold continues to consolidate
Yesterday brought the gold bounce we expected, pulling price away from the ongoing support level of $1178. Typically we have seen any upside restricted to below $1200 throughout May and thus I do think that any upside is likely to be capped around that level. No doubt we will have to see a breakout at some point, which I expect to be towards the upside. However, for now there is a clear period of consolidation which is likely to persist.

Silver heads for the top
Silver has seen a spike higher towards the upper end of the symmetrical triangle, providing a likely crossroads in the very near future. Should price move back to the upper threshold (currently $16.73) then it will provide the perfect opportunity.

I would expect to see price sell off from that level, but the fact that any move above there would invalidate the resistance means I can set my stops very close, providing a good risk/reward profile. While I do expect a little more upside, any move to $16.73 would bring a bearish view unless price breaks higher, in particular a move above $16.78.

Brent resurgence brings key questions for long-term implications
The spike higher in Brent crude yesterday came off the back of a very indecisive two days, with Friday posting a doji candle and Monday seeing very minimal volatility and direction. The question now is whether we can see a new high created or not.

A move above $69.62 would mean the bull trend continues. However, should the next high fail to top that marker, it would provide confidence that the uptrend is on the wane. For that reason, I am neutral today as I watch for intraday movements to provide clues as to which of the two will occur.

WTI spike falls short of new high
Much like Brent crude, WTI light has seen a significant spike yesterday which failed to create a new high. With price having created a new lower low, I am hesitant to jump back on board the bull train and, for now, I will similarly wait and see what the resolution is of this position.

A move above $62.57 would create a new high and bring a bullish outlook. Yet the failure to do so would lead to a reemergence of the bearish view.

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