Levels to watch: gold, silver and crude

Gold continues to battle to hold the $1200 level, while oil prices carry on seeing modest buying. 

Gold Bars
Source: Bloomberg

Gold could see further losses

The metal is enduring a second day below its trendline from November, but so long as $1200 holds gold fans have a glimmer of hope.

However, with the daily relative strength index and SMI both moving lower again the sellers appear to be in charge, with downside targets lying in the direction of $1180 and then $1170.

Yesterday’s bearish crossover of the 50- and 200-hour moving averages signals that downside momentum is once again operating in force, and the bearish crossover this morning in the hourly RSI opens the way to further losses for gold, assuming a breach of $1200 can be achieved.

Silver targets $15.50

Silver bears need to send the price below $16.20, which is proving to be support, but the declining 20- and 50-period EMAs on the four-hour chart point the way to more losses here. The next target is $15.50-$15.60, the lows from late December and early January.

The downtrend off the January highs is still intact, limiting the upside for silver, so for the moment $16.50 is likely as far as silver will get. A solid break of this downtrend on the daily chart is still the only remedy to get silver moving higher.

Brent could find support at 50-DMA

The 20-DMA continues to gently coax the price higher, although we still have to see a close above $62. Momentum indicators have been gliding lower but they may be on the cusp of moving higher, which provides the fuel for a rally. A drop through the 20-DMA would undo the bullish movement for Brent, with support then likely around the 50-DMA.

WTI's RSI moves higher

Bullish momentum appears in full flow here, with targets lying in the direction of the $55 level. The RSI and SMI have both sprung higher, which seems to give this move a degree of conviction.

A crossover of the 20- and 50-period EMAs on the four-hour chart is the key signal, although those looking to catch this move for US light crude would perhaps be advised to wait for the SMI in this time frame to pull back from its current overbought level. 

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