Commodities report: gold, silver and crude

Precious metals have spiked higher to regain ground. Meanwhile, oil continues to sell, yet could the 2015 low in Brent provide a bounce? 

Silver bars
Source: Bloomberg

Gold’s break back into wedge brings more bullish outlook

The recent break back above the $1105 level has brought the bulls back to the table, with the price initially moving to the projected target of $1135. However, a pullback has resulted in another catapult high, with the price now challenging the March low of $1143.

This brings us into a place where expectations of further gains mean that any pullback is seen as a possible buying opportunity. With that in mind, I am bullish while the price remains above the recent $1110 swing low.

Major resistance levels to watch out for that could spark the next retracement in gold are $1143, $1147 and $1162 and $1178.

Silver attempts to regain crucial $15.60 level

Silver stopped short at the double-bottom target of $15.60 last week, bringing significant losses in turn. However, despite the move back below $15, we have now seen a new higher low created which points towards further upside to come.

The $15.60 resistance is clearly the most important and immediate resistance level, yet a break and close above this would point towards further gains in the near term. The next major levels of resistance to watch out for are around $15.83 and $16.47. The bullish outlook remains in place unless the price moves below $14.73.

Brent hits massive seven-month support level

Brent has finally hit the January low which represents the biggest support level seen in the past two month selloff. The trend is certainly well set on its ways, but the reaction to this level will be absolutely crucial and fascinating.

A daily close below $46.40 would point towards yet another strong leg lower, where I would be watching for it to come back and retest $46.40 as a new resistance level. Otherwise, any bounce from here would see resistance at $48.24 as the most immediate and likely level to watch.

Ultimately I would need to see the price move above $51.10 to give me confidence that a more substantial bounce could be on the cards.

WTI sells off from resistance zone

WTI has sold off yet again from the key resistance zone between the January ($43.58) and March ($42.64) lows. The fact that Brent could see a bounce from its January low means we might also see a bounce in WTI too. However, for now, they both continue to exhibit lower highs and lower lows, and thus I am bearish unless the price moves back above $43.58.

There is a cluster of key support levels to watch to the downside, at $40, $37.15 and $33.21, alongside the descending trendline (currently at $39.40). However, unless we break to a new higher high, I see any bounce as an opportunity to gain a better price for the next step lower.

IGA, may distribute information/research produced by its respective foreign marketing partners within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

This information/research prepared by IGA or IGA Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

See important Research Disclaimer.