Technical analysis: key levels for gold, silver & crude

Upward progress in commodities is noticeably absent this morning, as the week starts on a quiet note for the asset class.

Gold
Source: Bloomberg

Gold looking bullish
The metal has so far failed to move beyond the $1209/$1210 area, although the uptrend off the March lows is still intact, with possible support entering around $1198. Relative strength index (RSI) and stochastics on the daily time frame have turned cautiously bullish, although the latter has yet to give a fully-fledged bullish crossover. The main upside target is still $1220, with $1190 providing support should the uptrend line be broken.

Silver struggles to break 100-SMA
Silver, however, looks less encouraging for the bulls, trapped as it is below the 100-simple moving average (SMA) at $16.29. For now $16.20 has provided good support, as has been the case since 9 April, but a break below here would target $16 and then $15.40. So far downward progress has been lacking – but upward movement has been no more plentiful. A break about the 100-SMA at $16.60 would head towards the $17 that has been so crucial over the past month.

Brent rally looks to falter
The rally here has begun to stall, with the price still unable to stage a daily close above $65. For the moment, it looks like Brent crude remains a ‘buy on the dips’ market, especially if we see weakness towards $62. However at present momentum must be maintained beyond $65 for the rally to continue for any extended period.

WTI may have stalled
It would be unwise to suggest the rally in US light crude has run its course, but progress above $58 has been lacking in recent sessions. An overbought reading on the daily RSI is one source for concern, but while the price remains above the 14-day exponential moving average ($53.74), dips on the four-hour chart towards $56.80 may still be bought. 

This information has been prepared by IG, a trading name of IG Markets 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. See full non-independent research disclaimer and quarterly summary.

Find articles by analysts

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.