Levels to watch: gold, silver and crude

A bounce in the US dollar has capped commodity gains, resulting in a period of consolidation.

A mining truck
Source: Bloomberg

USD bounce caps gold gains

Gold prices capped a three-day gain at $1,238, which has since backed off to its current level of $1,221 today. A move lower across the major equity indices prompted a sharp round of gold buying as global growth concerns came to the fore. However, with the major indices opening higher on Thursday gold has lost some of its shine, currently down -0.81% on the day.
The yellow metal has already pushed through an immediate downside risk range of $1,221 – which if held could turn into support, and may bring $1,215 into play. Should prices fail to close below $1,221 then its recent high of $1,238 could be retested, with further resistance at $1,242.

Silver trapped in consolidation

Silver was muted on Wednesday, which has resulted in a consolidation pattern between $17.11 and $16.91, with both now acting as immediate risk ranges. Should a close above/below either of these levels be seen then a downside target of $16.74 could come into play, or an upside target of $17.70.

Brent in for a short-term pull-back?

Brent prices continued to post fresh multi-year lows on Wednesday of $63.55 per barrel. The extended decline has resulted in its relative strength index indicator moving into oversold territory. However, without a change in the fundamental story it is unlikely that a sustained pull-back will be seen. However, price action is suggesting a short-term consolidation, which could see a retest of $65.56 and $67.16. Although, should a close be seen under $63.53 then it is business as usual, with the next clear area of consolidation presenting itself at
$57.67.

WTI consolidating

A similar story is being seen in WTI price action with a fresh low of $60.46 being printed on Wednesday, which has resulted in a shallow retracement. If this continues, we could see a retest of the $62.08 level. However, downside targets remain intact at $60.04.

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