Technical analysis: key levels for gold and crude

Gold is under further pressure after breaking key support, while there is little sign of tiredness in oil’s rally. 

Oil pump
Source: Bloomberg

Pressure on gold rises

The break below $1240 looks to have handed the initiative back to gold’s bears. Last week’s low at $1236 has also now been broken, and a close below here, and ideally below the 200-day simple moving average (SMA) at $1236, would open the way to $1223 and then $1214.

Bulls would need to recover the $1240 level and then push on above $1245 in the short-term, in order to suggest a move higher is underway. 

WTI pushed up by dropping rig count

Friday’s WTI rally moved into high gear after the weekly rig count data showed the first drop since early January. We have seen only small retracements here since the price changed direction down at $42. A bigger pullback could prompt some volatility, but also a change to add to longs or initiate new positions.

As long as the price holds $45, further gains seem likely, with further upside targets lying at $47.28 (the 50-day SMA), and then on to $49. 

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