Levels to watch: gold, silver and crude

The positive US jobs report has dampened investor sentiment regarding precious metals, but given a much-needed lift to oil.

Oil pump
Source: Bloomberg

Investors shirk gold in favour of risk

Gold is trading at $1,240.9, adding 0.22%, at the London open on Monday. This follows a sharp decline on Friday, when a recent low of $1,228 was posted as investors preferred to diversify back into riskier assets following the release of better-than-expected US jobs data. The latter came in at 257,000 versus the expected 234,000. The improving US jobs landscape has fuelled speculation regarding a US interest rate hike.

Gold prices are likely to find support at $1,233 – a level that resulted in an oversold reading of 13.5, which is probably the main driver behind the current pullback. Should downside continue to hold, there’s likely to be a retesting of $1,242, which if broken could see a move higher with the 200-day moving average coming into play. However, should downside support fail to hold then the next clear downside level will probably be seen at $1,225.

Oversold silver recovers

Silver is trading at $17.02, up 1.51%, having been dramatically oversold on Friday following the better-than-expected US jobs report. This resulted in a low of $16.56 coinciding with an oversold relative strength index (RSI) reading of 20. Current price action has seen a retesting of silver’s 50-hour moving average, which is placed at $17.05, and if held could see a resumption of the previous bearish trend that might bring $16.74 back into play. However, should topside resistance at $17.05 be breeched then the next clear level is likely to be seen at $17.30.

Brent boosted by US jobs data

Brent prices are trading at $58.28, down 0.50%. Monday’s opening session has seen price action back off its Friday highs of $59.10 after the positive US jobs number, which boosted market confidence about US growth prospects, so supporting oil prices higher. The 50-hour moving average continues to act as a point of support, which if continuing to hold could well see a retesting of topside resistance of $59.90. If breached, this could lead to $60.24 – a move supported by a reading of 55.9 in the relative strength index (RSI) indicator. However, given that the current oversupply issue remains unsolved, with production levels failing to be curbed, it could see a reversal back down to $55.38.

WTI aiming at a double top

WTI is down 0.25% on Monday, currently trading at $52.57, having attempted a double top during overnight markets. It posted a recent high of $53.31 but failed to reach $54.26 (3 February). However, the bulls remain in the driving seat, according to the relative strength index (RSI) reading of 58, which indicates a period of expansion. It’s likely that downside support is going to be seen at around the $51.28 level, which if held could see a retesting of $53.16-53.96. Should downside support fail to hold then the next clear downside target is likely to be seen at the $49.39 level. However, price action will have to take out that 50-hour moving average at $51.10 before a clear downside bias can be seen.

Denne informasjonen er utarbeidet av IG, forretningsnavnet til IG Markets Limited. I tillegg til disclaimeren nedenfor, inneholder ikke denne siden oversikt over kurser, eller tilbud om, eller oppfordring til, en transaksjon i noe finansielt instrument. IG påtar seg intet ansvar for handlinger basert på disse kommentarene og for eventuelle konsekvenser som et resultat av dette. Ingen garanti gis for nøyaktigheten eller fullstendigheten av denne informasjonen. Personer som handler ut i fra denne informasjonen gjør det på egen risiko. Forskning gitt her tar ikke hensyn til spesifikke investeringsmål, finansiell situasjon og behov som angår den enkelte person som mottar dette. Denne informasjonen er ikke utarbeidet i samsvar med regelverket for investeringsanalyser, så derfor er denne informasjonen ansett å være markedsføringsmateriale. Selv om vi ikke er hindret i å handle i forkant av våre anbefalinger, ønsker vi ikke å dra nytte av dem før de blir levert til våre kunder. Se fullstendig disclaimer og kvartalsvis oppsummering.