Levels to watch: gold, silver and crude

Commodity price action has been muted as attention turns to the release of the US non-farm payrolls data.

Silver bars
Source: Bloomberg

Gold under the spotlight ahead of NFP release

Gold prices were trading 0.24% higher, at $1,210, during today’s open session ahead of what is likely to be a volatile day for the precious metal following the release of the non-farm payroll data. This is expected to show an additional 240K jobs, which if achieved would likely add further pressure to gold prices.

Intermediate downside resistance levels for gold are placed at $1,206; however, given downside resistance has recently been tested and held, it’s likely a move above 50 in its relative strength index will lead to a retest of upside support at $1,220.

Silver slips back into consolidation range

Silver prices have retreated from their short-term highs of $16.71, trading at $16.28, following a resurgent bullish rally in the dollar which has lessened the need for investors to seek safe-haven assets. The downside move has seen silver, once again, slip back into a level which has previously seen a period of consolidation between $16.29 and $15.74. The two aforementioned levels will, however, now act as areas of both support and resistance.

Brent lacking directional bias

Brent prices have begun to consolidate around the lows, resulting in a clearly defined band of support and resistance between $49.93 and $51.53; both of which gift traders with clear areas of support and resistance. However, a catalyst for a breaking of either level is likely to be seen after the release of today’s NFP report.

A break below the $49.93 level is likely to lead to a fresh low of $49.16, supported by a 44 reading in its RSI. Should downside resistance hold, a retest of $52.26 could be brought into play.

WTI under pressure from 50-DMA

WTI is currently down 0.95% on the day, trading at $48.86, after touching a short-term high of $49.62. However, a risk to WTI is likely to be seen following today’s announcement of NFP data. Prior to the release – the 50-day moving average is capping any upside gains at $49.01, and should the level continue to hold a retest of $46.72 is possible. A break above the 50-day moving average, however, could trigger a move above long-term support of $49.39.

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