Technical analysis: key levels for gold and crude

Gold’s rally is on the cusp of a major breakout, while oil could be poised for a reversal. 

Gold bars
Source: Bloomberg

Gold pushing higher

Gold has pushed above the downtrend line off the July highs, so now we see if it can hold this level. A close below the trendline, back below $1265, coupled with overextended stochastics, could mark a bearish development, with a drop back to $1250 or lower possible.

 If $1265 holds then we look for a push to $1280 and then $1295. 

Gold chart

WTI – a close above the 200-day SMA on the way?

WTI is fighting hard to hold above the 200-day simple moving average (SMA) at $49.74, with a close above this line likely to signal a move in the direction of $50.52 and then $51.99.

A close below the 200-day SMA and then below $49.40 could suggest that a reversal is in play, creating a new lower high on the daily chart and increasing the possibility that the 2017 downtrend has resumed. 

WTI chart

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