Technical analysis: key levels for gold, silver & crude

Commodity prices are modestly under pressure today, as gold heads back towards the lows for the month.

Gold bars
Source: Bloomberg

Gold still looking down
The metal is struggling to hold $1190, with a continuation of the downward move heading towards $1180 and possible support. A close below this level still raises the prospect of another dip towards $1150. If the metal can recover however, then it is clear that the range trading of recent sessions is set to continue. The limit of gold’s ambition has been $1200 in recent weeks, with progress to the upside stalling repeatedly around this zone. Even so, the real test of any break higher will be the $1220 area.

Silver looks to break its downward move
Yesterday’s break below $16 suggests that more downside is on the way for silver, with a test of $15.50 a possibility. A sequence of lower highs and lower lows has been the norm over the past week, with support possible at $15.80 and then $15.70. A break of $16.10 would target the 200-hour simple moving average (SMA) at $16.17 and signal that the downward move has run its course.

Brent looks set for losses
It looks like we could see more losses in Brent crude, should the price break yesterday’s lows around $61.40. The 200-hour SMA continues to rise, but on the daily chart the relative strength index (RSI) is dropping lower once more. As a result, we could see an ongoing retracement towards support at $59. The key level of resistance is $65 and this must be broken to restart the upward move.

WTI also continues to drift
The drift lower continues for WTI, with the move downwards in the price matched by bearish moves in the daily RSI and stochastics. The price now finds itself sitting just above the 200-hour moving average at $55.85, with a break below here potentially carrying us back to the area around $53. A short-term bounce will probably be contained by the 100-hour MA at $57.10.

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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.