Levels to watch: gold, silver & crude

Oil’s bounce yesterday restored the flagging uptrend in Brent and WTI, but precious metals are still out of favour.

An oil pump
Source: Bloomberg

Gold continues its descent

Arguably gold is still heading lower, even if the journey is a choppy one. The metal finds itself stuck below the 50-day simple moving average (SMA) at $1193, while stochastics and the relative strength index (RSI) continue to decline. Support still lies around $1180, while a breakout will likely be constrained by $1210 and then the 100-day SMA at $1212.

Silver outlook still bearish

Having spent two days holding above $15.70 the bottom may be in for silver this time, if the price can rally back through $15.90, a turn higher in the RSI and stochastics would signal that a turnaround is in place. For the moment however the picture still leans to the bearish side of things, with a move back below $15.70 suggesting that the March low is still the likely destination.

More upside expected for Brent

After breaking higher yesterday and moving through the crucial $65 level, it looks like there is more to come fro Brent. A fresh target would now be the 200-day SMA at $75.80, although an overbought reading on the RSI is not too far away and should make buyers more assiduous about waiting for dips (ideally using indicators such as the RSI/stochastics on an hourly chart). A close back below $65 would negate the outlook, and put the emphasis back on the $61.80 region.

WTI remains below $58.70

US crude is still stuck below $58.70, so this is the level to watch. A close above here means that it is likely to follow its cousin Brent higher, but a failure to hold suggests the bottom end of this week’s range ($55.60) will be tested. A break below here would open the way to the 100-day SMA at $51.40.

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.