Levels to watch: gold, silver and crude

A spike in gold and silver points to a bullish phase.

Mining truck
Source: Bloomberg

Gold support continues consolidation

Yesterday saw a substantial bounce upon the historical $1178 support level, putting to bed the idea that we could return back towards the $1130 level anytime soon. The size of this bounce and close relatively near the top of the candle meant yesterday formed an opening marubozu candle, which is typically a sign of extreme bullishness. Given that we are trading within a range, any further upside would have to pass through significant resistance.

Current near-term support is at $1199, which given the current flag formation being formed above that level, should hold to provide the next leg higher. Resistance is likely to be found at $1210 and $1224, which if broken would point to a possible move up to the $1238 and $1256 levels for gold.

Overall I am now bullish given the close above $1199 and as long as price remains above that level I expect to see further upside towards $1224.

Silver flag signals further upside

Friday saw silver bounce upon the lower boundary of a symmetrical triangle dating back to December. This pointed to a possible reversal and as soon as price broke through the 20-period SMA (4 hour), we saw that massive spike higher in both gold and silver.

The consolidation today has formed a textbook flag formation with support provided by the 100- and 200-period (4 hour) SMA. Thus as long as price remains above $1630, I expect to see further strength come into play with a move back to $1680 likely.

Brent retracement likely to be short-lived

Crude oil prices have enjoyed somewhat of a resurgence in the past three months, gaining over $17 since the $46 low seen back in January. With some saying that they still believe prices could go lower long-term, it is hard to say whether that is going to be the case, yet from a technical standpoint things continue to look positive for now.

The past two trading days have seen a moderate retracement lower, with the 100-hour SMA (currently $6394) and 50-four-hour SMA (currently $6370) providing support for any move lower. Thus I expect to see another break higher in the near future, with $6750 a likely region of resistance. Conversely, should price close back below $6300, and in particular $6130, it would bring question marks of a potential reversal lower in the following weeks.

WTI consolidation points to short-term strength

Recent consolidation in WTI came as a result of a strong bull run starting in mid-March. Coming off the back of a medium-term uptrend, the outlook of an eventual breakout is for a move higher. With price currently near the lower level of this current bullish rectangle, I expect to see a move higher as long as the price is above $5573. This would call for a move back towards $5830 in the near-term, with the medium-term picture being determined by the eventual breakout direction.

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.