Levels to watch: gold, silver and crude

The commodities market is likely to spend most of its day waiting for Janet Yellen to speak, but already the bears seem to be gaining the upper hand. 

Silver bars
Source: Bloomberg

Gold RSI in decline

Yesterday’s bounce in gold has not been maintained so far this morning, and the price has moved back below the November rising trendline. For the time being the downside target is still $1180, with only a close back above the $1200 mark and the aforementioned trend likely to signal a reversal.

The daily relative strength index continues to decline as well, pushing into oversold territory for the first time since the beginning of November.

Silver support lies at $15.50

Despite the rally yesterday off $6.10 silver remains under pressure. Any move above $16.50 is still being sold, which still leaves the emphasis to the downside.

Major support at $15.50 still lies in the background, but only a move through $17 will change the outlook here.

Brent could see further sellers below $58

Brent is rapidly heading towards potential support at the 20-day moving average, but the RSI and other momentum indicators still point to fresh downside. The 50-DMA and the $55 level neatly coincide as support for the time being, while any further declines would mean that Brent finds itself once again below the downtrend line from summer 2014 levels.

The rising trendline from the 30 January lows is now a distant memory, as the 20- and 50-hour MAs cross below the 200-hour, with the 100-hour not far behind. A drop below Thursday’s low of $58 will bring out further sellers.

WTI dropping quicker than Brent

The $48.70 level is providing some short-term support, being the low seen yesterday, but US light crude is moving lower even quicker than its Brent counterpart.

The price now finds itself below the 20-DMA once more, while the SMI is in firmly bearish mode. The drop of the daily RSI below 50 indicates that there is likely further downside on the way, potentially as far as the lows from January around $45.

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