Levels to watch: gold, silver and crude

Possible supply restrictions have pushed oil higher while safe-haven precious metals lose their allure. 

Oil pipes
Source: Bloomberg

Gold loses its shine

Gold prices have started the week on the back foot, currently trading at $1,274; down 0.48% at the London open session as capital flows support the dollar higher, lessening demand for the precious metal safe-haven.

The recent bullish move was capped by its 200-day moving average at $1,285, which has since resulted in a break below its 100-hour moving average at $1,278; this is now likely to act as topside resistance. Should resistance hold then a downside retest of the $1,269 level is possible.

Silver upside capped by 50-hour MA

Silver prices are down 0.78%, currently trading at $17.03 in which the 50-hour MA continues to dictate the short-term directional bias of silver, with price action failing to break topside resistance since January 29. Should resistance continue to hold then downside projections are placed at $16.91 – a move also supported by a contractionary reading of 42 in its relative strength index (RSI). A break above short-term resistance could see the 50-hour MA turn into support, with upside targets placed at the 100-hour MA at $17.55.

Brent spikes higher

Brent prices have jumped higher on Monday, adding 1.64% on the day and currently trading at $53.02 following news of worker strikes at US oil refineries whose production accounts for 10% of the US gasoline and diesel production.

The move higher has resulted in an oversold reading of 73.3 in its RSI, which may see a short-term retest of downside support at $52.48. If this support is broken we could see a further move lower to $51.47. Alternatively, should the current bullish move continue higher the next clear upside target is likely to be seen at $53.76.

WTI breaks key resistance

WTI added 1.57% on Monday, currently trading at $47.96 after news of strike action at US Steel’s major oil refineries. This is likely to weigh on rolling supply levels despite an existing oversupply issue in the market.

Price action has seen a move through key resistance at the 200-hour MA at $46.57. This is likely to turn into support, and if held could see a further move higher to $49.39. A break of this support may lead to $51.28. However, a move lower is likely to be seen over the short-term following a move into overbought territory in its RSI at 73.74. Should a pull-back be seen the first area likely to be retested is at $46.72.

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