Technical analysis: key levels for gold and crude

Gold has managed to clamber off its lows, while oil now has some work to break key resistance. 

Gold bars
Source: Bloomberg

Gold could see a move to 200-day SMA

We may have seen a bottom in gold for the time being. The price has bounced off the lows for the week, and if we see a move above $1250 momentum buying may help this rally to gather pace.

If this happens, we would look for a move to the 200-day simple moving average (SMA) - currently $1281 - and then on towards the descending trendline off the 2016 highs.

Brent could see $44.11

The bounce yesterday has carried the price back to the 200-day SMA ($47.56). The price now needs to break higher and close above $48.70 to indicate fresh momentum.

With daily stochastics turning higher, we may see further gains, but intraday overbought levels and today’s crude inventory figures could lead to some nervousness. A move lower targets $45.35 and then $44.11 for Brent.

WTI could drop lower

The price is retreating from yesterday’s highs, having once again tried to break back above the rising trendline that dominated for most of the year.

If it continues to move lower we look for support near Monday’s lows around $43 for WTI. A rally needs to post a daily close above the rising trendline, ($46.74), and then move on to the 50-day SMA ($47.88). 

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.