Technical analysis: key levels for gold and crude

Gold is trying to pick itself up off the floor after yesterday’s huge sell-off, while oil prices show no sign of stopping their march higher.

Mining trucks
Source: Bloomberg

Gold eyes $1300

A small bounce is underway this morning after the remarkable price action yesterday. The uptrend for the year has been broken, so it looks like rallies will be sold for the time being. The next target on the downside would seem to be the 200-day simple moving average (SMA) at $1257, which would coincide well with the closing low of 23 June.

Below this the $1207 level comes into play. A rally needs to clear $1275 in the short-term, and then head back towards $1300.

Brent could see fresh buyers at $50.80

Small dips have been assiduously bought here, and with the price now above the mid-August high of $51.40 the next area to watch would be $52.93.

So far we have seen a steady sequence of higher lows and higher highs, so a move back to $50.80 could see fresh buyers.

It would need a firm break below $50 to really give any indication that the rally has run its course.

WTI overbought

Here bullish targets are $50.62 and then $52.03, with little sign thus far that the buyers are losing strength, even if the commodity is now overbought for the first time since mid-August.

It would take a move below $49.85 to suggest there is a chance that the post-OPEC bounce has come to an end. 

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.