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Gold rally losing momentum
Yet again the yellow metal finds its rally losing momentum, with yesterday’s attempt to move closer to $1240 beaten back this morning. Below $1238 the metal will target $1220 and then $1215, with a turn lower in the daily relative strength index and a potential topping out of the stochastic momentum index suggesting that the gains have run their course for now.
A move above $1240 still targets $1250 and then $1262, with potential resistance around the 50-day moving average at $1253.
Silver could fall to $16.80
Today’s dramatic fall in the silver price demonstrates clearly how the rally of recent days was simply the oversold bounce that had been looming for a while. The $17.50 level and the 20-DMA both served nicely as resistance, with the target below now $16.80. A close through here targets $16.15 and then $15.05.
Brent still oversold
Brent’s oversold condition continues, and while this might be a reminder that some form of bounce is due the fundamental picture is still firmly bearish.
The $82.70 level looks like the next target on the downside, while any bounce will need to breach $90 and then move on to the 20-DMA, currently around the $93.40 level.
WTI to test $80 level
The 2012 weekly closing low at $80 will be the first big support that will be tested, followed on by $78.15 and then $77.35. The weekly stochastic momentum chart is now at a level that usually indicates a bounce is due, but again any bounces will be taken as an excuse to sell again.
On the upside immediate targets for WTI are $83.60, then $86.30 and potentially $87.98.