Levels to watch: gold, silver and crude

Markets are preparing for the release of the Federal Open Market Committee statement, which is likely to result in an uptick in volatility.

A mining truck
Source: Bloomberg

Gold remains in consolidation

Gold prices are continuing to consolidate around its previous highs, with a clear topside resistance level at $1,302 and a downside support level placed at $1,274.

The metal is currently trading at $1,288 and is likely to receive a flurry of activity today on the back of tonight’s release from the FOMC as well as the Federal funds rate, which is expected to be held at 0.25%. Both releases are scheduled for 7.00pm (London time).

The pullback in gold has tested the 200-hour moving average at $1,285, but has since received support, and if held could then point to a retest of resistance placed at $1,303. If this is taken out then a move towards $1,321 is likely. However, with a reading of 48 in its relative strength index, a further move to the downside may still be in play. This will need to break the 200-hour MA in order to confirm a bearish bias, and if achieved could lead to $1,274.

Silver backs tamely off its highs

Silver prices are trading at $18.02, down 0.26% on the day. With a backdrop of economic uncertainty and recent monetary stimulus from the European Central Bank, pressure has been mounting in regards to a possible rate hike form the Fed, which makes statements like todays particularly poignant.

Silver prices have retreated from the Tuesday high of $18.21, but price action still remains in an expansionary trend according to its RSI at 50.6. Should the 50-hour MA at $17.98 continue to act as support then a retest of the 100-hour at $18.12 is likely to come into play. However, if downside support fails then the next clear area of support is placed at $17.92.

Brent targeting further downside

Brent prices are trading at $48.82, down 0.91% on Wednesday after touching a recent high of $49.99 on Tuesday. The reversal back below a key area of resistance, at $49.19, is supported by its 100-hour MA at $48.78. A push past this could lead to a retest of previous downside support at $48.19. Although, should the aforementioned level hold, and a bullish trend is confirmed by a break above $49.19, then the next level of topside resistance is seen at $50.06.

WTI remains under pressure

WTI is trading at $45.19, down 0.64% as markets begin to position themselves ahead the FOMC statement in what is likely to be a volatile trading session.

WTI’s 100-hour MA has continued to act as topside resistance, currently trading at $45.91, and if this is held a retest of downside targets currently placed at $42.20 is likely. However, should price action push through resistance then the next clear level of topside resistance is at the 200-hour at $46.78.

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