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Technical analysis: key levels for gold and crude

Gold is back above $1200, a sign of a possible reversal in the price, while oil has failed to make much headway on the upside.

Gold bars
Source: Bloomberg

Gold coming back up?

Gold tumbled back below $1200 last night but managed to claw higher, with this key level still providing some signs of buying pressure. However, it still needs to create a new higher high above $1215 to indicate further upward moves are on the way.

A close above $1220 would be the definite sign that more gains are in store. If $1200 breaks, we could see a move to $1180, the 27 January low, with the possibility this will be followed by further falls in the direction of $1124 and the December 2016 low.

Gold chart

WTI in an unsure place

A sharp WTI rally off the lows yesterday could have been short-covering, but it still left the price unable to break back above $49.50, and also stuck below the rising trendline off the February 2016 lows.

Crucially, the price created a new lower low on the hourly chart, suggesting the bounce is another selling opportunity, albeit on a day when EIA inventories and the Federal Reserve decision promise elevated volatility. The price would need to break back above $50 to indicate firm momentum to the upside, while a drop below yesterday’s low at $47.60 would be a definite indication of more declines, perhaps as far as $45.10. 

WTI chart

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