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Levels to watch: gold, silver and crude

There were further losses in gold and silver during the morning session, although oil prices were so far little changed.

Silver bars
Source: Bloomberg

US dollar strength has been the recurring theme of the week and this morning is no exception. Commodity bulls are still being hammered by a rising US currency and elevated yields on Treasury bonds that leave the raw materials sector out of favour.

Gold finds support at $1200

With gold barely 1% from the $1200 mark we are witnessing a watershed moment in this particular commodity. The $1200 level has been the major support on a weekly chart, with a weekly close through here opening the way to $1178.

Any rebound still needs to clear $1222, which would then carry it on to the $1240 area. Until the momentum indicators, such as moving average convergence/divergence and relative strength index, turn higher it seems the downward trend is set to continue.

Silver gains capped by 50-H MA

Support at $17.50 on a weekly chart running back to 2010 is doing a good job of halting further declines in silver prices. The RSI is still showing a heavily oversold reading, but there is little sign of a bounce developing just yet. Attempts to break higher have been short-lived at best, with the 50-hour moving average and even the 20-hour MA capping gains.

The first downside target is the $17.42 level from Monday.

Brent could target $95.60

There seems little sign of a turnaround here, and $97.25 is proving to be resistance for the time being. Any drop through $96.80 would target $95.60, and with the commodity no longer reading as oversold any rallies are likely to run out of steam as the sellers step back in.

WTI breaks through 200-H MA

The 20-day moving average is holding back US light crude, although the three-day bounce in this commodity shows there are buyers determined to push the price upwards. The drop in US crude inventories certainly helped, but the area around $94 should prove to be resistance.

WTI has broken through the 200-hour MA for the time being, but should find resistance at $93.50, while the intraday RSI is once again pushing into overbought territory. Any close through $93.50 would target $94 and then $95.

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