Levels to watch: gold, silver and crude

Oil prices have stabilised after yesterday’s big move, but there seems little chance of recovering much of the ground lost. 

Gold bars
Source: Bloomberg

Gold to try and buck recent trend
As with indices, gold’s behaviour yesterday was a carbon copy of last week – a higher open, then a move lower. Two attempts to break $1175 yesterday failed, so this is the first upside level that needs to be breached. Further gains will require a move back above $1180 and then on to the 50-day simple moving average at $1188. What has become apparent in recent sessions is that the area around $1160 - $1165 is providing good support, with buyers stepping in. With the price now moving back above a rising 50-hour SMA ($1168), buyers may continue to step in for another attempt to challenge $1175.


Silver to challenge 14-day EMA
Gains by silver have been capped by the 14-day exponential moving average ($15.83), while $15.50 continues to provide support on the downside. Thus the metal finds itself in another descending triangle. A breakout higher would target $16 and then on to $16.30, while a move below $15.50 would encounter the support zone of the March lows, around $15.30/$15.40. 


Brent looks likely to continue its slip
Yesterday’s rout confirms that there is still more downside to come for Brent crude, especially given high production levels and record stockpiles around the globe. $55 is the next key level on the downside, and while we may see a short-term bounce today, rallies are there to be sold. Ideally a move back towards the 50-hour EMA ($59.08) would provide such an opportunity. A move below $55 would head towards the March lows around $52.50, while any bounce needs to clear the $60 level to be in with a chance of reversing the current downward path.

Brent crude

WTI looks to follow similar path as Brent crude
If US light crude can stabilise around $53, then we may see a challenge of the 100-day SMA at $55.10. However, a continuation of the downward move would head towards the psychologically important $50 mark. As with Brent, intraday rallies are there to be sold, so watch out for these as they appear, perhaps by using hourly stochastics.  

US light crude

IGA, may distribute information/research produced by its respective foreign affiliates 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.