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.
Gold consolidation remains as support holds
Gold remains within the middle of a falling wedge that has been in play since mid-2013. The current period of consolidation has remained for almost two months and for the most part, the support level of $1178 has held up. Thus, I use the $1178 level as a pivot. Any move back to that level provides a buying opportunity to play the sideways price action back towards the $1190 region. However, should price close below $1178 on the daily timeframe, it would likely signal a move back to $1145. With a weekly stochastic failure swing likely to complete in the coming weeks, I do have an overall bullish bias for a move back towards the upper-end of this wedge, around $1255.
Silver bounce signals possible short-term strength
Silver appears to be moving lower following the move towards the upper-end of the symmetrical triangle in place throughout 2015. Having said this, we have seen a clear rejection at the $16.14 support level, spiking higher to create a long wicked hammer formation. This gives me the feeling that we could see some recovery in the short-term, despite it looking bearish overall. Should we see any bounce, I would expect it to be capped around $16.56. But ultimately I do expect us to see a move to $11.90 by the end of the week.
Brent spike likely to be short-lived
This morning has seen yet more consolidation, followed by a small spike higher. The price of Brent crude has seen days of consolidation now, with price action trading within a descending triangle. Ultimately we will need a move below $64.23 for the next leg lower, yet with this current move higher, I expect sellers to come back in at the resistance zone between $65.16 and $65.30. My bias remains bearish as I believe that $70 marks the top for this stage of the Brent crude recovery.
WTI candles spell indecision
Like Brent crude, WTI light has been consolidating following a selloff from the highs posted last week. However, unlike crude, we haven’t actually seen a break to create a new lower low. The support provided by the 20 day simple moving average and $58.81 level is holding for now and we need to see it close below that level for confidence of a move lower. Until then, I expect it to continue to range between $58.81 and $59.90. The breakout of that range will be crucial for direction.