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Commodities Brief: Precious metals hold previous lows as consolidation continues

FXstreet.com (Barcelona) - The precious metals markets again traded in wide ranges, but finished well off the lows set early in the Asia session. There wasn’t a specific macro catalyst for the rebounds, as the majority of major currency rates remained quiet throughout much of the day. After briefly trading down to 1335, Gold managed to find solid support at previous lows and edged higher the rest of the day to close up 1% at 1390. Silver also managed to fight off early selling, at one point trading all the way down to 22.43 before clawing its way back to finish a shade lower 23.24.

Crude Oil WTI also managed to finish well off the lows, closing up 2.30% at 88.61. The early weakness actually took Oil to its lowest level (85.90) since June 2012, before finding support and edging higher similar to the action in gold and silver.
From a technical standpoint, not much has changed over the last 3 days in Gold and Silver. After severe moves down earlier in the week, price is consolidating as market participants wait to judge the next move. Although the range is very wide, the main resistance pivot continues to be 1410, and support 1330. As for silver, the main resistance pivot continues to be 24.10, while support sits at 22.40.

There is an interesting technical development to point out on the daily chart of Oil. A “bullish divergence” between price and momentum formed today, as price made a new low but the RSI (14) did not. This is typical behavior between price and momentum in a market which is in a strong downward, as eventually price becomes oversold which leads to a short term bounce or short covering. The “bullish divergence” shouldn’t be looked at as a major trend change, just a de-tour which could support a “bear flag” type rally before the longer term downtrend resumes.

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