Levels to watch: gold, silver and crude

A stronger dollar has knocked the fight out of commodities, with the complex drifting lower so far this morning. 

Oil pipeway
Source: Bloomberg

Gold rally unlikely

The fall in gold prices continues, with the metal now at its lowest level for over a week. A break through $1180 would then point towards a continuation of these losses, backed up by a firmly bearish posture for the relative strength index and stochastics. I see little reason for a gold rally unless the price succeeds in breaking above $1200. Downside targets lie in the direction of $1160 and then $1140.

Silver finds support at $16.50

The picture is the same here, putting the emphasis on the downside for the metal. For now the $16.50 level is providing support, but a close below here will bring out further sellers, accelerating the decline towards $16. A comprehensive turn lower in both the RSI and stochastics confirms the move, with the price needing to recover last week’s highs around $17 if it is to stabilise and move higher.

Brent awaits new bearish sign

Yesterday’s move upwards is being swiftly reversed in Brent crude. Instead the outlook for this market has become firmly bearish, with a possibility that we will test the lows of the month. A drop through the 10-day simple moving average for the RSI points the way, with the stochastic momentum index about to give a fresh bearish signal.

WTI's RSI lower

The sellers are back in control in this asset as well, with yesterday’s lows looking precarious at best. The rally of mid-March could be quickly eroded in coming days – with a target of the March lows around $43.80. As before, the RSI and stochastics point the way, with both moving lower this morning and signaling that more losses are to come. 

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