Technical analysis: key levels for gold, silver and crude

The outlook remains bearish for commodities at present, with the downward trends in gold and silver continuing to hold sway.

A man walking by oil barrels
Source: Bloomberg

Gold slips below 50-DMA

Gold’s seemingly-inexorable slip through the 50-day moving average has been confirmed today, and it is now up to the 200-DMA to hold this market up. Admittedly there may be some support at $1280, as was the case at the end of last week, but if this is lost then we look towards $1270 and then $1240 as potential levels.

On the hourly chart the move back above the 50-hour MA is a short-term positive one, but it will need to break the 200-hour as well, currently at $1295. The intraday relative strength index is dropping back, while on the same timeframe the stochastic momentum index appears to be turning lower, suggesting a retest of yesterday’s highs may be too much to ask.

Silver moving lower with gold

As gold goes, so does silver. The two metals have been moving lower in tandem, but silver as ever has to be the more dynamic of the two, dropping below the 200-DMA today for the first time since mid-March. Unlike gold, silver’s weekly chart did not see the 20-week moving average cross over the 50-week MA, remaining firmly bearish on a long-term view.

The loss of the 200-DMA means the 100-DMA, at $20, may be the next level to look for. Otherwise, the $19.78 area could be support, but the metal still looks vulnerable to a drop in the direction of the $19 level and then the June lows around $18.80.

Brent's 20-DMA pointing lower 

Brent has stabilised above $105, a key level on the weekly chart. However, we will need to see further gains above $106 for a sustained move, and while the 20-DMA still points firmly lower there seems little reason to shift the view to the bullish side of things. Any break back below $105 would target $104 and then $103.30.

On the hourly chart, the move above the 50-period MA is suggesting some more upside is possible. However, $105.60-$105.70 is likely to hold back progress, as was the case yesterday. The $104.50 level, the low from 1 and 4 August, will be the first area to watch for support.

NYMEX could target $97.50

Although trading at $98.40 at the time of writing, it is still incumbent on NYMEX to break the 200-DMA and the $100 mark to say the dip has come to an end. With the daily RSI apparently unable to rise much beyond 30, there seems little that can drive the price higher at present.

The hourly chart is running into the 100-period MA, but a declining intraday RSI and a continually falling stochastic momentum index on the hourly chart suggests that upward momentum is dissipating. Any drop lower targets $97.50.

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