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Technical analysis: key levels for gold and crude

Janet Yellen’s speech today will likely drive the dollar and thus play a key role in what happens to commodity prices, both today and into the new week.

Gold bullion
Source: Bloomberg

Gold awaits Janet Yellen’s speech

The deteriorating uptrend here might well push lower if Janet Yellen is sufficiently hawkish. The next target on the downside would be in the direction of $1305, where the sell-off in July ran out of steam.

If the price can rally, then the first area of resistance would be the 50-day simple moving average (SMA) at $1333, while above this the longer-term target would be $1380. A close above here is needed to create a new higher high to maintain the uptrend. 

Gold price chart

Brent rally may favour the sellers

Those without a care about Janet Yellen might see the overnight Brent rally as a selling opportunity, since it formed a new lower high.

A first push towards $48.50 and then below would create a new lower low. The price needs to move through $50.90 to suggest a bounce is in the offing. 

Brent crude price chart

WTI remains trapped in a downtrend

Here too the price has rallied off the lows seen yesterday, although it remains stuck in a downtrend. A move down would head towards $46.40, and then below this to the 50-day SMA at $45.60. The August uptrend could see the price retrace as far as $45 before bouncing. 

US light crude price chart

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