Technical analysis: key levels for gold and crude

Gold has held above yesterday’s lows, creating the potential for a bounce, but oil’s gains yesterday faded away into the afternoon, leaving the sellers in charge.

Oil plant
Source: Bloomberg

Gold pushes higher

Having stabilised yesterday the price has pushed higher once again, an indication that we may see another bounce. In this case, the target would be $1333, the 50-day simple moving average (SMA), and then the peak from the beginning of September at $1352.

The price needs to push above this level and break the downtrend off the 2016 highs to maintain momentum. The $1302 mark continues to provide possible support.

Gold chart

Brent set to drop

Despite an early move higher yesterday, Brent was unable to hold its gains. This makes it more likely that we will see a drop back to the previous support level at $45.30, while below this the 200-day SMA at $44.52 comes into view.

Gains yesterday and on 15 September fizzled out at $47.24, so any bounce in the near-term needs to clear this level. 

Brent chart

WTI struggles to make gains

Here too, the early bounce ran out of steam with the $44.70 area halting gains yesterday as it did last Thursday. Now we look to see if key support at $43.22 holds, which would lead to a rangebound situation for WTI, between $43.22 and $44.70.

Below $43.22, the price could test the $41.50 level or even the August low at $40. 

WTI chart

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