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Levels to watch: gold, silver and crude

On a day when gold and silver test new multi-year lows it will be difficult to establish clear ranges, but the ongoing retreat in oil still provides clear levels.

Oil refinery
Source: Bloomberg

Even easing from the Bank of Japan can’t save precious metals, which seem to have had the rug pulled from under them thanks to the Federal Reserve. However the rebound in equity indices hasn’t spread to oil, and continued strength in the dollar should mean that this class stays out of the general rally.

Gold oversold on weekly chart

Support on the downside for gold is chiefly to be found at $1180, the lows of 2013, and then on to the $1154 level. The metal is now oversold on a weekly chart, and the last time this happened, in late September, we had a brief bounce, but even a rise to $1250 would still only bring out the sellers again.

A daily close above $1180 would give some measure of upside towards the 50-DMA at $1235.

Silver kept above $16

Buyers have stepped in to save silver from dropping below $16, but any bounce from oversold levels will just bring the price to the July downtrend around $16.80.

Support on a weekly chart lies around $15.10 and then $12.75.

Brent hopes for support at $85

The retreat from $88 continues for Brent, although $85 might provide some support as was the case on Tuesday. Below that the price would target $84.50, $84.10 and then $83. Upside rallies should find resistance around $86 and the 200-hour MA and then the 50-hour at $86.50.

WTI drifts towards $80

US light’s steady decline from $83 means that we are now pushing towards $80 once again, although the intraday RSI has yet to hit oversold levels so there is likely to be more downside on the way. Downside targets are around $79.60, while $81.20 is the first area to look for resistance.

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