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Technical analysis: key levels for gold and crude

A stronger dollar does little for commodity prices, and this is what we have seen play out in the twelve hours since the Fed decision.

Oil pump at sunset
Source: Bloomberg

Gold hit by hawkish Fed

Unsurprisingly, the Federal Reserve’s shift to a more hawkish stance for next year has done little for gold. The price tested the area around $1133 overnight, so this is the first area of support to watch. Any rally, which may still materialise despite last night’s meeting, would need to push on above $1160 to suggest consolidation rather than further losses are likely.

From here the price needs to clear $1170 and then $1180. Further weakness could see the price head towards $1122 and then $1106. 

Gold price chart

Brent resting above key support

Brent crude oil prices have been moving lower all week from their gap up on Friday, and now find themselves resting above key support at $54. A move below here would target $52.55 and then $51.14. Bulls would want to see the price head back above $55, which would open the way to another test of $57. 

Brent crude price chart

WTI to end 2016 on a low?

WTI's push below $52 suggests we are likely to see lower oil prices towards the end of the year. At present the price is oversold intraday, so a bounce could materialise, but overall it looks like a move below $50 is on the cards.

Potential support is possible around $51, $50.25 and then $48.94. A bounce has to get a daily close back above $52, which might then target $53 and $54.35. 

WTI crude price chart

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