Gold, silver and oil prices drop on recession fears

​Gold slips to the $1,722 September 2021 low

Gold trades in ten-month lows and is fast approaching the September 2021 low at $1,722 per troy ounce around which it is expected to find support, at least in the short-term.

In line with several other commodities, gold is now trading well below the Russian invasion of Ukraine levels as the US dollar continues to surge to multi-decade highs on safe haven flows.

A drop and daily chart close below the $1,722 low would engage the August 2021 low at $1,684 and also the June 2020 and March 2021 lows at $1,678 to $1,671.

Minor resistance can now be found at the $1,753 to $1,754 last reaction high on the daily chart last Friday and the December 2021 trough.

Silver weighs on major support at its February 2020 pre-pandemic high

The price of silver is in the process of falling for its seventh consecutive week with the February 2020 pre-pandemic high at $18.95 per troy ounce being revisited as the US dollar trades in multi-decade highs on safe haven flows. It represents key support.

If it were to give way, the next downside target for silver would be the 61.8% Fibonacci retracement of the 2020 to 2021 bull market and the June 2020 high at $18.48 to $18.39.

The 1 July low, together with the last reaction high on the daily chart – where a candle’s highest point is above that to its left and to its right – offer immediate resistance at $19.38 to $19.48 ahead of the minor psychological $20 mark.

WTI consolidates below resistance

West Texas Intermediate (WTI) crude oil’s sharp drop from its 5 July $109.65 per barrel high took it to last week’s low at $93.33, close to the 200-day simple moving average (SMA) at $93.18 and the March and April lows at $92.69 to $92.45, before recovering to last week’s high at $103.00.

It was the previous support line which became a resistance line and stalled the rise. Since then, oil has slipped again on fresh Covid-19 curbs in China and mounting worries of a global economic slowdown weighing on the commodity.

Yesterday’s low at $98.65 may be retested, below which major support remains to be seen at $93.18 to $92.45.

Minor resistance sits at the June low at $101.22, at last week’s $103.00 high. Further resistance comes along the breached uptrend line and 1 July low at $103.39 to $103.45.

A fall through and daily chart close below the $92.45 March low would mean that the price of WTI has left its March-to-July wide trading range and would probably push it lower towards the October 2021 high at $85.06.