Technical analysis: key levels for gold, silver & crude

Commodity prices have crept higher amid an uncertain outlook, but the gains do not yet look sustainable.

Gold bars
Source: Bloomberg

Gold finds support at 50-DMA

Today’s trading below $1300 marks the first time gold has opened below this key level in almost a month.

The battered metal has found some much needed support at the 50-day moving average, with a few hopeful buyers stepping in.

So long as the 200-DMA/$1280 zone remains intact, the default view here is cautiously bullish in that small gains appear more likely than losses. However, a drop below $1280 would seriously imperil any attempts to rally, with $1260 then in focus.

Silver could find support at $20.60

Modest buying has done little to alleviate silver’s woes. $20.60 could provide some support in the short term, but the steady drift below the 200-hour moving average points us in the direction of further losses.

The next line in the sand should be the 200-DMA, currently around $20.30, even if there is still something of an uptrend from the June lows.

Brent crude could expect more losses

A dive yesterday through $107 was repulsed, and this appears to be the limit of the downward move for Brent for now.

The relative strength index is bouncing near oversold levels once again, while stochastics seem to be indicating the beginnings of a turnaround. Although, until this is confirmed by a recovery of the 200-DMA, the view remains a cautious one.

The next big target is $105 if $107 is lost, and based on recent activity, when one small up day is followed by a large downward move, there seems a sound basis to expect more losses.

NYMEX looks for reassurance above $102

The recovery of $100 and a hold above the 200-DMA is an encouraging sign for NYMEX, hinting at some sort of modest reversal.

However, a declining trend line from late June could continue to cap the upside here, tripping up any attempt at a rally.

Only a close back above $102 would be the needed reassurance that the selling here has come to a halt for now.

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