Technical analysis: key levels for gold, silver and crude

Reports of further Russian involvement in Ukraine have given gold and silver a boost, while oil continues to rise slowly from lows seen earlier in the month.

Oil pump
Source: Bloomberg

Gold targets 100-DMA

Gold has moved above $1290 once again this morning, but will need to hold above here if it is to make any progress higher.

A move above the 200-day moving average and the rising daily relative strength index does suggest that we may finally be seeing some upward momentum. On the upside the 100-DMA around $1296 becomes a near-term target, and then on to the big $1300 level, the round number that seems to repeatedly crop up.

The hourly chart shows the 200-hour moving average has been breached to the upside for the first time since 6 August, although a sharply overbought reading on the intraday RSI is a point of concern. Rising support, however, should be found in the region of the 50-hour MA.

Silver heads back to $19.80

A sharp move in silver has carried it through the July downtrend line, pushing the price back towards $19.80 for the first time in around two weeks.

Now the price must clear the 100-DMA around $19.95, while the $20.05 zone has also proven to be tricky. However, we are seeing upturns in the daily moving average convergence/divergence and stochastic momentum indicators as well as the sharp rise in the daily RSI. Such a confluence of indicators has not been seen since the beginning of June, when the price surged from below $19 to above $21 in the space of a few weeks.

The $19.50 zone now serves as support on the downside.

$102.50 stemming Brent selling

Recent attempts to break through $103 in this market have been defeated, but the steady rise from levels near $101 earlier in the month is intact.

Brent needs to move above $103 to maintain the momentum, but attempts to break through the 20-DMA in recent weeks have all been halted.

The hourly chart shows a steady rise in Brent over the past two weeks, and with the intraday RSI holding above 50 there is reason to expect another attempt to clear $103. On the downside $102.50 has stemmed the selling so far today, leading to a tight trading range for the commodity over the past 48 hours.

WTI supported by $93.40

The $94 level is currently a big area for WTI and presents major resistance, even if like Brent the commodity has recovered from the lows earlier in the month.

A move from oversold levels on the daily RSI and a turn higher for the MACD in the same timeframe may point to additional upside, but $94.40 is also going to be something of a hurdle.

Rising support off the month lows can now be found around $93.40, although the 50-hour MA has held back progress so far today.

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