Technical analysis: key levels for gold and crude

WTI’s recovery last night puts the commodity firmly on the front foot, while gold is revisiting a trendline not seen for several weeks.

Source: Bloomberg

Gold price drops
The price for gold has retreated almost to the rising daily trendline, last touched right at the beginning of February. $1225 may provide support along this line, with a break below it heading towards the $1200 level. A bounce higher heads towards $1240 and then on towards $1260.

Brent remains trapped
The price has recovered off the lows of the session for Brent, but remains trapped below the 50-hour simple moving average (SMA), $39.22. This moving average has now crossed below the 200-hour SMA ($39.39), so we may see bearish momentum increase.

A break below yesterday’s lows around $38.30 would then suggest a move back to the rising trendline that began back in February. A break back above $40 would put the commodity on course to test the recent highs above $41. 

WTI back above the rising trendline
The price shot higher yesterday afternoon for WTI, confirming that $36 is the level to watch on the downside. It is now back above the rising trendline from the February lows, so now the bulls need to push on above $39 to confirm that the rally is still in effect. In this case the next area to target is $42, the high from early December. 

The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication.