Technical analysis: key levels for gold and crude

Gold is flying this morning, breaking a key trendline, while oil is fighting to hold key support. 

Gold bar
Source: Bloomberg

Gold up and up

Fresh dollar weakness is helping drive gold higher, with the price now through the descending trendline that held at the end of February.

Now the bulls must post a daily close above $1264, which would also put it back above the 200-day simple moving average ($1260). The next big area is $1307, the early November 2016 high. Short term, we would look for support around $1240 and then $1225. 

WTI depending on OPEC’s actions

The $47.60 mark has held as support for a number of sessions for WTI, so while this holds a bounce back towards $49.50 in the first instance that could be seen. If momentum builds from here and $49.50 is recovered then a move back to $50 and higher is a possibility. The next stop is $51.80. 

On the downside a loss of $47.60 could spike a bigger move, towards $44.51 and then $43.08. Much of this will likely depend on whether OPEC pushes for more cuts to production.

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. See full non-independent research disclaimer and quarterly summary.