Gold fails to hold above 20-DMA
Although off the lows, another drift down for gold today seems to suggest that the buying pressure here is fast disappearing.
On a daily chart the momentum indicators, chiefly the relative strength index, are heading lower, and the failure to hold above the 20-day moving average is a crucial sign that the short-term trend is down.
If $1300 is broken then the 200-DMA at $1286 comes into play, with the potential for some support around the 50-DMA at $1294.
Silver fails to break through $21
Successive attempts to break through $21 by silver have been defeated, putting the emphasis on the downside. If we see a break of the $20.70 zone then the next stop would likely be the 200-DMA around $20.30.
As before, the key hope for silver is the four-hour chart, where the 200-period moving average is still rising and acting as upward, sloping support. Currently at $20.60, a bounce here would set the stage for another attempt to push through $21. Only this would signal another attempt to reach $21.50, the high for the month.
Brent could find support at $107
Brent crude is struggling to maintain yesterday’s close above the $108 level, and any failure to achieve this would send a signal that another move to $107 is on the cards. Rising momentum indicators suggest that some sort of floor may be forming at $107, but I will remain sceptical of any move higher until it clears the 200-DMA and can push firmly in the direction of $110.
NYMEX eyes $102 level
A turn higher in the moving average convergence/divergence means that this indicator has now joined the RSI and stochastics in indicating the move higher for NYMEX, from $102, may have some legs to it.
Even so, I would be cautious and wait until the 50-DMA is breached and the 2014 uptrend is recovered. On the downside, $100 continues to be the ‘big level’ psychological support that will hold this market up.