Technical analysis: key levels for gold, silver and crude

Gold and silver are rising for the second consecutive day, while oil prices are seeing some support yet again.

Silver bars
Source: Bloomberg

 Gold 100-DMA to cap gains?

The precious metal has found support in the region of the 50-daily moving average, giving it the strength to move away from $1300. However, the 100-DMA is now providing resistance on the upside, while the Tuesday close at $1308 could hinder short-term progress too.

Further gains to the upside could be capped by the 200-hour moving average, even if the intraday relative strength index is no longer flashing an overbought reading.

Silver sees modest gains

Modest gains for silver off yesterday’s lows around $20.60 have seen the commodity move upwards today as well, but on an intraday chart the 100- and 200-hour moving averages, together with the $21 level, could easily prevent the metal from making further progress. The move through the 20-DMA suggests there is the potential for more downside, heading towards the 200-DMA around $20.31, even if the lagging 50-DMA is still moving higher.

Silver is no longer overbought on a daily basis, and a gradually rising RSI provides some hope of further gains, but a close back above $21 is needed to suggest the weakness has run its course.

Brent crude becomes active

Brent's open back above $107 sends a signal that some buyers may finally be active here, but a move through $108 is needed to confirm the move. The daily RSI is now moving out of oversold territory, while stochastics are suggesting a turnaround is in progress as well. However, the 200-DMA around $108.90 is still going to make the move higher more difficult.

On the downside $106 should prove strong support, as witnessed by the price activity on Tuesday when a dive lower was met with strong buying.

NYMEX breaks downtrend

It seems that NYMEX has finally broken the downtrend from mid-June, with a move back through $102 supported by the RSI and stochastics, both of which are now no longer oversold. Now the 100-DMA needs to be breached, followed on by a move through $104, and we can then say that the 2014 uptrend is back in business.

If the move higher does falter then the downside should be limited by the all-important $100 level, which did excellent work on Tuesday at stemming the selling.

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