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Gold supported by $1309
The drop below $1320 for gold sends a clear message that this upward rally has run out of steam. A rolling over in various momentum indicators (stochastics, MACD) suggests that a pullback is developing.
I would look towards $1309 as the first area of support, then onwards to the 100-day moving average at $1304.80. Ultimately, the failure to hold above $1320 sets the tone for the week, with a medium-term target being $1280 should $1300 be broken.
Only a close back above $1320 reignites the upside scenario, and a potential move to $1330.
Silver unlikely to make more gains
Silver is dropping back below $21 at the time of writing, with potentially significant developments in the offing.
It could just be a working off of the overbought condition for the commodity, but the lack of upward progress following the break of $21 last week does not send a signal that more gains are on the way.
Downside trades would be aiming for $20.50, around the 20-DMA, and thence towards $20.34, the 200-DMA. A move through $21 again on the upside would need a close above $21.20 to make the case for a move in the direction of $21.50.
Brent makes modest gains
The run lower for Brent seems to be coming to a halt, with modest gains above the 50-DMA this morning.
The relative strength index has begun to rise slightly, ending the downward progression that has prevailed, with a move above the 50 mid-point for this indicator signaling a more bullish outlook.
If the 50-DMA continues to hold then we would wait for other indicators such as stochastics to turn higher, but such an occurrence would signal the start of a slow grind back towards $115.
US light crude RSI moving higher
The dip has yet to be fully bought in this market but this may eventually come to pass this week, especially if the $104 level is recovered.
As with Brent, the RSI is beginning to move higher, and a close above the 20-DMA would be the signal many are waiting for. Ultimately, it does not yet pay to argue with this uptrend, and a move back to the June highs is probably still on the cards.