Technical analysis: key levels for gold and crude

Oil’s rally shows little sign of stopping, but gold’s hopes of bouncing back to the year’s highs look to have been dashed.

Oil rig
Source: Bloomberg

Gold on a precipice

Gold is at risk of pushing lower, having created a new lower high off the downtrend from the July peak. The next target on the downside would be $1305, with a move below here creating a new lower low that could indicate the beginning of sustained weakness. A bounce needs to clear $1350 to open the way to the July high at $1375.

Brent clings on

After a strong move higher this week crude is tempering its gains, although the steady progression of higher highs and higher lows on the hourly chart continues.

The next target, once through yesterday’s high at $50, would be the $51 peak. Dips towards the 50-hour simple moving average at $48.58 may well see buyers come back in.

WTI may be in for some weakness

A similar picture prevails here, although the hourly chart points to a possible bearish outlook. Although it has rallied, each surge has hit the underside of the August rising trendline, and so this could indicate more weakness ahead.

First-line support is possible around $46, where yesterday’s dip found buyers, and then below this around $44.60. 

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