Levels to watch: gold, silver and crude

The revival in equity market sentiment has been witnessed oil prices rallying, but gold has once again failed to hold above the $1240 level.

Gold bearings
Source: Bloomberg

Gold could return to $1184

Yesterday’s failure to break $1240 means that we are now looking to a test of the close from Wednesday, around $1230. A drop through here would move on to challenge $1224 and then $1220. The daily relative strength index is faltering at its current level and a move lower could well pull the rug out from underneath this rally and leave gold looking to drop back to the $1184 lows.

The hourly chart might give some support around the 200-hour moving average at $1227 but even here the picture is not bullish, with the intraday RSI dropping back.

Silver rangebound

Silver finds itself stuck between a rock and a hard place, namely $17 and $17.50 respectively. This rangebound activity means that traders need to stay nimble.

A break through $17.50 would put the emphasis on targets in the direction of $17.80 and then $18.50, while a drop back through $17 suggests the October lows around $16.80 will be revisited.

Brent could drop to $83 level

The $84 level seems to be holding for now and Brent is steadily working off the oversold condition that has dogged it throughout October.

A move through the 50- and 100-hour MAs means that the 200-hour is now in play for the first time since the end of September. A break above $88.85 would then signal a possible test of $91.

Meanwhile a drop lower here means we look to the intraday lows around $83 that we saw on Thursday.

WTI breaks 100-hour MA

Yesterday’s price action indicates that US light crude is not particularly keen at present on moving above $84, although today has seen it break the 100-hour MA. However, sellers stepped back in as the intraday RSI moved close to overbought levels and we are seeing a similar pattern today. A drop back would suggest another attempt to break $81.80, while a continuation of this upward move targets the 200-hour at $84.90.

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