Levels to watch: gold, silver and crude

The Swiss National Bank announcement caused market turmoil which resulted in capital seeking safety. 

Oil rig
Source: Bloomberg

Gold spikes higher on uncertainty

Gold prices rose sharply higher on Thursday following a surprise announcement from the SNB in which the central bank removed its EUR/CHF peg of €1.20, resulting in a 30% fall in the pair. The aftermath across global markets is still playing out.

With uncertainty, as well as further erosion in confidence behind the ability of central banks, markets have moved capital into safe havens, such as gold, which rose 2.97% on Thursday. At the London open on Friday, the yellow metal is trading at $1,258 having touched an intermediate topside level of resistance at $1,260, which will continue to cap gains. However, should prices break resistance the next clear target is at $1,275. Although, with Thursday’s higher coinciding with an overbought reading of 80 on its relative strength index it’s likely to see a pullback to a previous level of support at $1,248.

Silver grinding up

Silver prices are down 0.48% at the London open, currently trading at $16.94 having posted a recent high of $17.23 on Thursday amid the SNB’s recent actions. Silver prices are currently trading around its key level of support, at $16.93 level, which if held could see a retesting of Thursday’s topside resistance at $17.13. However, should downside support fail to hold then the next downside target is seen at $16.79.

Brent sparks back into life

During the fallout of the SNB’s decision to remove its currency peg to the euro at €1.20, Brent prices spiked to high of $52.44 before settling at $48.48. However, such a move has seen previous resistance at $48.19 turn into support with Brent prices currently trading at $49.61.

Should downside support hold then a target of its 200-period (hourly) moving average at $50.04 could be brought into play.

WTI breaks through key support

WTI prices are currently trading at $47.80, adding 2.43% at the London open session on Friday, which has seen price action break above both the 50- ($46.56) and 100- ($47.52) period (hourly) moving averages offering key support in a move higher. This could see upside targets of $49.39 brought into play.

However, should a break below said moving average levels be seen then a retesting of Wednesday’s low of $45.02 is likely. 

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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.