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Levels to watch: gold, silver and crude

Quantitative easing in the eurozone has done little for gold and silver, while oil prices remain quiet ahead of non-farm payrolls today. 

Silver bars
Source: Bloomberg

Gold sellers regain control

Gold’s drop through $1200 puts the sellers back in control, assuming they can achieve a daily close below that level. As noted before, the $1180 and $1170 regions are the next potential support areas, while the drop of the daily relative strength index below its 10-day moving average confirms the bearish trend is back in force.

Only a close back above the November trendline would negate the outlook at present, with upside limited to $1220 for the time being.

Silver in retreat

Silver’s decline today takes it back towards $16, and a daily close below here would trigger orders that would ignite bearish momentum towards the $15.50 zone. The inability to break through the downtrend from the January highs is an eerie echo of the metal’s performance in the second part of 2014, when a decline from highs above $21 in June continued for five months before a reversal began.

The price must break $16.50 to begin a move higher, with an initial target of the mid-February highs at $17.40.

Brent's RSI heading lower

Even as the price holds above the 20-DMA, the RSI and stochastic indicators for Brent continue to decline. A break below $59.50 would suggest a drop back towards the 50-DMA at $53.50, while for the time being resistance is still to be found around $62, the level that has prevailed since the middle of February.

WTI rangebound

US light crude finds itself stuck in an admittedly wide range, bounded by $48 on the downside and $53 on the upside. The crossover of the 20- and 50-period EMAs on the four-hour chart confirms the bullish short-term momentum, and while for now the SMI is still declining, any bullish crossover would be a potential buying opportunity, with an immediate target of yesterday’s highs at $52. 

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