Technical analysis: key levels for gold and crude

A big drop for gold yesterday leaves the commodity in a firm downtrend, but oil prices remain in a steady move higher. 

Gold bars
Source: Bloomberg

Gold

Yesterday saw heavy losses for gold, in its worst day for the month. Much of the early June rally has now been unwound, and while we may see some short-covering here and a consolidation period, the overall trend remains down.

Thus, so long as the price holds below $1280 we should see a continued move down towards the 50-day simple moving average at $1256, while below this the index will target $1243 and the 100-day simple moving average (SMA). 

Gold

Brent

Like stock markets, oil has enjoyed a good week thus far, but it is hardly surprising to see it stall as the UK’s referendum draws near. The $51 level is capping gains for now, but could see a breakout to $53 and the highs from early June for Brent.

It would take a move back below $50 to negate the currently bullish outlook, and in which case we would look to see if the price can test the 50-day SMA at $47.52. 

Brent

WTI

The rally here remains intact, with yesterday’s dip bringing out fresh buyers. Crucially, the price fell back to test $50, and then rallied off this level. Arguably we are now looking for a return to the June highs around $51.60.

For the time being dips may well find fresh buyers, although as the UK’s vote looms this market, like many others, may see decreasing volumes as traders look to cut back on risk. We would need to see a move below $48, the key support from late May and early June, to alter the current bullish outlook for WTI.

WTI

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