Technical analysis: key levels for gold, silver and crude

With US markets off for Labor Day, commodities are unlikely to see the beginning of any sustained moves as volumes remain light.

Silver bars
Source: Bloomberg

Amid all the uncertainty surrounding Ukraine, the European Central Bank and other events, one thing is clear —  gold and silver are still not receiving real buying impetus. Both precious metals normally see increased buying during periods of geopolitical tension, but this has not occurred, or at least not in any significant fashion. Talk of central bank quantitative easing usually gets the gold bugs going too, but the ECB’s apparent leanings in the direction of easing have not sent investors racing for precious metals.

In oil markets, WTI has bounced significantly from its lows, while Brent is climbing higher at a snail's pace. However, the supply overhang still means that long-term upside in this asset seems limited.

Gold eyes $1290

Gold has managed to find some buyers today, remaining above the 200-day moving average, but until the $1290 level is broken it is hard to envisage real upside here. Even a surge through $1290 would still need to clear $1295.

Meanwhile, the $1280 level will become support if the 200-DMA is breached, with further support likely at $1270.

Silver fails to break 20-DMA

The region above $19.50 has proved to be a major hurdle for silver, with attempts to move higher held back by this area. Each time a move develops it fails to breach the 20-DMA, currently around $19.65, while $19.70 should also be a resistance level.

On the downside, support may be found around $19.38, and then nearby the August lows around $19.31.

Brent could go higher

The $103.40 level has served as a barrier to recent upside, and the price has to breach the 20-DMA, which has served well to hold back any gains.

A rising daily relative strength index indicates that there may be some strength in this rise, which means a move above $103.40 would then open the way to $103.80.

Any drop lower would need to break $102 and then on to support just above the $101 area.

WTI targets $96

US crude has rallied 3.4% from its August lows, and seems minded to breach the short-term downtrend running from $103.20. For further gains it must break $96. While the 50-DMA has now fallen below the 200-DMA, a bearish sign, those looking to short might prefer to wait for the price to fall back below the 20-DMA and for the RSI to fall below the 50-mark.

The hourly chart shows a rising tend from the $92.50 area, with the $94 region currently moving into view as potential support.

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