Levels to watch: gold, silver and crude

Safe haven assets continue to outperform as markets remain uncertain.

Oil barrels
Source: Bloomberg

Uncertain markets continue to favour gold

Gold prices added a further 0.52% during Wednesday’s open session as capital flows continue to pour into safe haven assets on the back of uncertainty surrounding central bank policy. Today saw more dovish-than-expected data from the Bank of England with two Monetary Policy Committee members, who previously had voted for a rate hike, in favour of an unchanged level. Thursday sees the European Central Bank report its latest interest rate decision, followed by a press conference in which markets will be awaiting some bias regarding the implementation of some form of monetary easing. 

Gold prices touched a high of $1,303, a level which will most likely act as topside resistance which if broken could see $1,340 brought into play. However, with gold prices overbought on an hourly timeframe, should price action fail to retest gold’s previous high then downside targets of $1,286 (50-hour moving average) and $1,272 (100-H MA) could be seen.

Silver capped by 200-day moving average

Silver prices added 1.71% on Wednesday, currently trading at $18.22 having touched a high of $18.33. Further upside was capped by the 200-DMA, trading at $18.20, coupled with an overbought reading of 75, suggesting a possible pullback off the highs.

However, should $18.20 fail to hold then the next clear upside target is likely to be seen at $18.45. Should the 200-DMA hold then a retesting of the 50-H MA, currently trading at $17.85, is likely to be brought into play.

Brent remains oversold

Brent prices continue to receive support at the $48.19 level having retested the level overnight before rallying to its current area of $48.94, with upside targets of $49.16. If these are broken we could see a retesting of the 15 January high of $52.42. However, any upside is likely to be capped by a fundamental oversupply issue with OPEC unwilling to curb production levels.

As a result, Brent continues to show an oversold reading on a daily timeframe. Should a break below $48.19 be seen then the next clear downside area is likely to be $45.21.

WTI retesting key support level

WTI prices are trading at $47, up 0.53% on Wednesday having posted an overnight low of $46.41. This saw a failure to post a close below $46.72 — a key level of support, which should it continue to hold could see a move higher with targets of $49.39. However, currently capping a move higher is the 100-H MA, currently trading at $47.23. Should the 100-H MA continue to act as topside resistance it’s likely to result in a retesting of $45.

 

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