Global stocks: Commodities this week - Brent Crude, Gold and Silver

Published September 19, 2018

Commodities prices for Brent Crude, also known as black gold, Gold and the most widely used industrial metal Silver are based on a wide range of factors. Macro-economic factors, international demand & supply and policy makers' decisions are only to name a few fundamental driving factors.
We as technical analysts on the other hand look at the price movement and patterns of any instrument to understand what could be the next move. Technical analysis, as per theory, assumes that all market information is cashed in to the price already. Hence what the picture shown in the form of a price chart has already taken all market facts and stories. So, what do the charts say about commodities? Let us have a look.

Brent Crude NYMEX (BZ.FUT) Close: 79.03

Brent Crude NYMEX is in a rising trend channel in the medium term chart. Rising trends indicate that the instrument experiences positive development and that buy interest among investors is increasing.
Last week a positive breakout was given from a rectangle formation, which is a positive sign. However, the price is just under the resistance level of 80 dollars per barrel. A breakout and close above 80 dollars will generate a new buy signal and may open for new buying opportunity. There is support around 75 dollars in the short term.
Momentum indicator RSI over 70 is positive, which eventually suggests underlying strength in Brent Crude. Investtech’s quantitative research on Nordic stocks suggests that there is a higher tendency for stocks to rise further in price than to move otherwise when RSI goes over 70, and vice versa. Read more about our research on RSI at www.thetrendbible.com
Investtech's recommendation(one to six months): Weak Buy

Gold (GC.FUT) Close: 1198.50

Since 2016 Gold prices have swung between 1370 and 1130 dollars per ounce in the long term. This implies uncertainty among investors and shows no clear direction. It suggests sideways trend in near future unless a break out from one of the above-mentioned levels.
On a shorter and medium term chart, Gold has broken above the upper trend channel line. The precious commodity is close to resistance of 1210-1211 dollars. A close above this level may take the Gold price to 1240 dollars per ounce or higher. There is downside support around 1174.
Investtech's recommendation(one to six months): Watch

Silver (SI.FUT) Close: 14.19

The most widely used industrial metal Silver is in a downward trend channel in all time horizons, that is short, medium and long term. Around the middle of June, Silver gave a sell signal via break down from a rectangle in the medium term and has fallen over 12 per cent since then.
In the longer term chart the commodity has given a sell signal, again from a rectangle formation. However, on the other hand, it is still over its earlier support level of 13.70 dollars per ounce. A breakdown and close below this level may lead to strong selling pressure. There is resistance around 15.50 dollars per ounce in Silver. If the price closes above 15.50 then we may see a change in trend, but that may take its own sweet time.
Investtech's recommendation(one to six months): Sell

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Note: These instruments are traded in currency based on the exchange or country they are listed/traded on. All prices are based on close as on September 18, 2018

The analyses are based on closing price as per September 18, 2018.