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Levels to watch: gold, silver and crude

Commodities left mixed following widespread support for the US dollar.

Oil barrels
Source: Bloomberg

Gold prices consolidate on USD strength

Gold prices have begun to consolidate to the downside at a key intermediate level of support of $1,186 with a consolidation range of $1,184 and $1,188. This gifts traders both near-term support/resistance levels before ascertaining a longer-term directional bias.

The recent widespread support for the dollar is likely to continue to weigh in on gold prices. Should a close be seen sub-$1,186 then the next key area of possible support is likely to manifest itself at $1,178 with the aforementioned area of support turning into resistance.

Silver reverses gains

Silver prices broke to the upside out of its recent consolidation pattern on 30 December touching a high of $16.47, but has since reversed to the downside with a recent low of $15.56 to its current trading level of $15.79. This suggests that the previous levels of consolidation at $16.29 and $15.60 are back in play, offering traders levels to watch before taking a longer-term directional view.

Are Brent prices poised to push higher?

Brent prices touched a recent low of $55.84 on 31 December, which has since seen prices rally back to a key level of topside intermediate resistance of $57.67, currently trading at $57.68. Should a close be seen above the aforementioned intermediate resistance then a re-testing of $59.88 could well be seen.

This is supported by an expansionary reading in Brent’s relative strength index indicator of 55.3. However, should topside resistance hold and the long-standing bearish trend resume, then a re-testing to the downside of $55.90 would become increasingly likely.

WTI fails to sustain bullish move

WTI prices have more or less mirrored the move in Brent prices, posting a lower-high of $53.26 off a recent low of $52.44 (31 December). However, the price has failed to sustain a bullish move above a key level of intermediate resistance at $53.96, and is currently trading at $53.60.

Should the aforementioned resistance level hold, then a re-testing of its recent low of $52.44 could well be seen. However, should WTI prices continue to track Brent then a close bar will need to be seen above $53.96 in order to increase confidence of a re-testing of $56.04.

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