Silver Tests Support At $19.00 As Treasury Yields Rebound

Key Insights

• Precious metals found themselves under strong pressure as Treasury yields and U.S. dollar moved higher. 
• WTI oil pulled back as traders focused on coronavirus lockdowns in China. 
• Copper declined as bulls failed to find additional positive catalysts. 

Silver Retreats Ahead Of The Weekend

Silver gained strong downside momentum and moved towards the $19.00 level as Treasury yields rebounded after the recent pullback. The rebound of the U.S. dollar has also put pressure on silver.

In case silver settles below the $19.00 level, it will move towards the next support at $18.80. A successful test of this support level will open the way to the test of the support at $18.50.

On the upside, a move above the resistance at $19.15 will push silver towards the resistance at the 50 EMA at $19.35. In case silver settles back above the 50 EMA, it will head towards the resistance level at $19.65.

Other previous metals are also moving lower. Gold is testing the support level at $1640. Platinum declined towards the $950 level, while palladium settled below $1900.

WTI Oil Pulls Back As Traders Take Some Profits Off The Table

WTI oil moved below the $88 level as traders took profits after the recent rally. China has recently locked down a part of Wuhan, the city where the coronavirus pandemic began. This developement served as a negative catalyst for oil markets as it reminded traders that China maintained its strict zero-COVID policy.

From a big picture point of view, markets continue to prepare for the price cap on Russian oil, which should be announced before December 5. Most likely, Russian exports will decline, but the size of this decline remains unclear. This uncertainty may provide some support to oil prices in the upcoming weeks.

Natural Gas Tries To Settle Below $5.50

Natural gas pulled back towards $5.50 as traders focused on the weather forecast, which remained unfavorable for high natural gas consumption. Profit-taking after the recent rebound also played a role in today’s decline.

In case natural gas settles back below the $5.50 level, it will move towards the next support at $5.35. RSI remains in the moderate territory, so there is plenty of room to gain additional downside momentum in case the right catalysts emerge.

Copper Stays Volatile Within The Previous Trading Range

Copper  settled back below $3.50 and declined towards the 20 EMA at $3.44 amid a broad pullback in commodity markets.

At this point, copper markets do not have sufficient catalysts to get out of the $3.30 – $3.60 range.

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