Levels to watch: gold, silver and crude

Commodities have seen tentative buying, but their broad picture is still firmly bearish.

An oil pump
Source: Bloomberg

So often this month bounces in commodity prices have been short lived. So it is proving again. Agricultural commodities are joining in the fun, but it is gold and oil that command attention. Until the dollar surge comes to an end it seems likely we will see further declines in this asset class.

Gold lacking buyers

There is little hope for further upside in gold unless it can breach $1225, and there is scant sign it is able to accomplish this at present. Although no longer oversold the daily relative strength index hasn’t moved above 50 so far this month, indicating a lack of buyers.

Any close through the September low of $1214 targets $1198 and then $1191.

Silver still in oversold territory

The $17.70 level holds for now in silver, but we are still awaiting the move out of oversold territory. Any break to the upside targets $18.50, while declines would point towards weekly support at $17 and then $16.50.

20-DMA capping Brent progress

If Brent crude manages a weekly close below $96.75 then the way is clear to head towards the 2012 lows at $91.

A rise back towards $99 would take the price to the 20-day moving average, which has done a fine job of capping upside progress.

The hourly chart shows that attempts to break the 50-hour MA have been firmly repulsed so far this week, so $97.10 remains the first possible line of resistance for the time being.

WTI targets resistance at $91.65

US light crude is looking to break resistance around $91.65, with a close above here pointing towards the 20-DMA around $93.20.

Moves below $90.30 have been halted so far this month, but a close through here targets the $88 level.

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