Commodities report: gold, silver and crude

Precious metals consolidate today, while the crude spike on Friday brings us to crucial resistance levels.

Gold bars
Source: Bloomberg

The increasing doubts of Federal Reserve action in 2015 have weakened the US dollar significantly, leading to a period of recovery across many of the US denominated commodities. 

Gold could see $1178

Gold bulls have been well and truly in control throughout October, as dollar weakness continues to drive the price higher. However, price now approaches a key resistance level at $1170 which represents the August peak. Given how notable this level is, I would expect some form of response.

However, we have seen gold take out a number of notable levels relatively easily and thus I would not be surprised to see a break.

For now, I await the response to $1170, where a close above this level would indicate a possible move towards $1178, which is the next major level of resistance. However, be aware of any bearish reversal signals below $1178 for some form of retracement.

Silver eyes $16.15

Silver is moving higher once more despite having pulled back from clear resistance at a 15-month trendline, coupled with the 200-day SMA.

A move above both these crucial resistance levels would be particularly bullish and thus I am looking out for a break back above $16.13 to spark a possible move towards $16.45.

The $15.60 mark formed the double-bottom neckline, which is broken and thus provides us with a projected target of $17.25. I expect us to see silver move higher from here and believe a break above $16.15 would be the spark needed to set silver back onto its recent upward path.

Brent crude turning lower

Unlike WTI, Brent has failed to retake the early September peak ($54.31) and is instead turning lower.

The inability to create a new high is certainly worrying and should we see a move back below $52.24, it would bring expectations of further losses. Any bullish sentiment would only return upon breaking above $54.31.

Until that happens, I am watching out for a break below $52.24, which would bring about expectations of a move lower, where support levels of $51.25 and $50.30 come into play.

WTI resistance could target $54

The break above $49.32 for WTI certainly brings about a more bullish picture, yet the case still remains that we have a lower high in play and as such a break back below $49.32 would bring about bearish connotations. Especially given that this represents the crucial resistance level that we have been watching last week.

For now, I am relatively bullish as long as price remains above $49.32, yet a break below could turn the outlook on its head and bring us back into the $43-49 range that has been in play.

I would only become strongly bullish should Brent also join WTI above the September high, yet treating WTI alone, I believe it looks bullish unless price moves below $49.32.

Support levels below would be $48.50 and $47.80, while resistance levels to watch are at $50.60 and $54.

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