Technical analysis: key levels for gold, silver & crude

Oil prices are in retreat this morning, off recent highs, but gold still finds itself holding up well above $1200.

Source: Bloomberg

Gold struggles above $1200
Although still above $1200, gold is finding life difficult much beyond this level. A break above the 100-day simple moving average (SMA), $1212, is still proving to be elusive, so longs should be cautious until this event occurs, if it does. Meanwhile, the continuation of the rally off the week’s lows has meant that the stochastic index has begun to look more positive, albeit it has yet to post a bullish crossover.

The four-hour chart saw a bounce off the 200-period SMA ($1187) earlier in the week, but for the moment gains have been capped by $1210. While the metal continues to find support off a rising trendline from the March lows, the bulls still probably have the upper hand but must manage a push towards $1220 in coming days.

Silver looks up
Having remained above $16 all week, silver looks more positive, even if it remains below the 50-period exponential moving average (EMA) on the four-hour chart ($16.40). The daily relative strength index (RSI) has pulled above its 10-day SMA, heading back towards the crucial 50 mid-point reading that would indicate buyers being in firm control. A close above $16.50 would set the stage for a test of $17/$17.20, the area around which momentum stalled over the past month.

A failure to hold $16 puts the $15.50 level in play, and then onwards to the November lows at $15.

Brent crude aims to close above $65
Brent got within a whisker of $65 yesterday, and while off the highs, it still looks like there is more to come, should the price manage a daily close above $65. Any pullback may well find support at $62 and then $61.20, while a more sustained move would test the $59.70 area.

Long positions cautious on WTI
US light crude remains close to yesterday’s highs, even if the RSI and stochastics on the four-hour chart are still trending lower. With the daily RSI now overbought, longs should be cautious, but the target for any further move upwards is still $59.10.

Downside targets are first $64 and then $52.40, should this early morning weakness turn into something more substantial. 

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