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Gold price pushes hard into resistance, Brent holds gains while aluminium hovers over support

Technical outlook on gold, Brent crude oil and aluminium amid lower-than-expected US March inflation data and demand concerns in China due to Covid-19 restrictions.

​Gold tries to break through key resistance area

Fears of soaring inflation led to the price of gold staying elevated within its key $1,959 to $1,974 resistance area for the past two days.

It consists of the September and November 2020, January 2021, and February 2022 highs. If it and yesterday’s high at $1,978 were to be exceeded, the psychological $2,000 mark would be in focus. Further up lies the 10 March high at $2,009.

Minor support is seen between the 31 March and 5 April highs at $1,950 to $1,944 with further support coming in at the $1,916 early April low as well as along the 55-day simple moving average (SMA) at $1,905.

Further down lie the recent trading band’s troughs between the mid- to late March lows at $1,901 to $1,891.

Brent crude oil holds gains

Brent crude oil is holding yesterday’s strong gains as OPEC warned that it would prove impossible to replace potential supply losses from Russia, despite China’s crude oil imports dropping for a second consecutive month as Covid-19 restrictions bite.

The March-to-April downtrend line at $107.60 is currently in view. If bettered, the 5 April $109.55 high will be eyed, together with the 30 March high at $112.20. Further up the $116.48 to $120.48 resistance zone remains to be seen which contains the 3, 10 and 24 March highs.

Potential slips may find support between the 29 March low and the 55-day SMA at $102.25 to $101.80. Further down lie the five-month uptrend and this week’s low at $98.00 to $97.42.

Aluminium remains above key support at $3,223

Aluminium found interim support at its mid-March’s $3,223 per tonne low despite Covid-19 lockdowns in China leading to slowing demand for the industrial metal.

Prices of the metal used in transport, construction and packaging have already fallen by over 12% from their $3,733 24 March high and continue to hover above key support at $3,223, a fall through which would lead to the January high and February 11 low at $$3,109 to $3,057 being targeted. Further down the February low can be found at $2,964.

Resistance continues to be seen between the 7 April low, the 55-day SMA and the one-month downtrend line at $3,341 to $3,376.

For the bulls to be back in charge, a rise above the last reaction high at the 5 April high at $3,514 would need to ensue, something which looks unlikely at present, given this week’s swift decline.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material 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 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. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

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