Technical analysis: key levels for gold, silver and crude

The dance around $1320 in gold continues, while Brent crude’s dive is still ongoing this afternoon.

Barrels of oil
Source: Bloomberg

Gold bulls gathering strength?

The fact that buyers keep stepping in every time the price falls below $1320 indicates we may actually see further gains in gold. The first target remains $1330, and then $1333, but the price needs to break out from this $20 or so range before a clear move can be said to have established itself.

The 100-daily moving average $1304 could provide support if we do see a sustained move down, but for the moment it doesn’t appear that gold wants to go that way.

The move of the 50-DMA above the 200-DMA is telling, and would suggest the bull case is gathering momentum.

Silver see floor around $21

As gold progresses, so does silver. A floor has been built around $21, and so we now look to the $21.50 level and then $22 as near-term targets.

However, an apparent turn lower in the moving average convergence-divergence, and the continuing oversold condition of the commodity, suggests we will see more tight-range trading, mirroring recent sessions.

Thus, the order of the day remains quick entries and exits for those so inclined, with bears waiting for any solid close below the 20-DMA moving average before going short.

Brent crude falls through 50-DMA

Having fallen through the 50-DMA yesterday, support for Brent crude now falls to the 100-DMA or the nearby 200-DMA. Any drop through the 200-DMA would signal a fresh move towards $108, and then in the direction of $107 where buyers could be found in late April and early May.

Any turnaround would need to be built on top of the 50-DMA, currently at $110.41, but bulls would need to see a change in the relative strength index and other momentum indicators before this can happen.

US light crude awaits indicators

Short-term bounces in NYMEX today have been firmly sold, leaving us below the 50-DMA, but we would need to see a break of the uptrend line from early January before preparing for more losses. If it does continue to decline, then the $102 from the beginning of June would be a short-term target.

On the upside, a close above $104.40 would be needed, along with (ideally) a turnaround in the RSI and confirmation from other indicators. 

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This information has been prepared by IG, a trading name of IG Markets Limited and IG Markets South Africa Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. 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. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. International accounts are offered by IG Markets Limited in the UK (FCA Number 195355), a juristic representative of IG Markets South Africa Limited (FSP No 41393). South African residents are required to obtain the necessary tax clearance certificates in line with their foreign investment allowance and may not use credit or debit cards to fund their international account.