Technical analysis: key levels for gold and crude

Dollar weakness has done wonders for commodity prices, with gold and oil both surging. 

Crude oil pipe
Source: Bloomberg

Gold pushing up strongly

Gold recovered in spectacular form yesterday, recovering most of the losses of the past week, and pushing back above the vital $1220 level.

While it has pulled back from its overnight highs, it looks as if the momentum will carry the price high, with a potential first target at $1254. Above this $1260 and then $1271 come into play. Buyers came in to defend the $1195/$1200 area, so the bears would need to get the price back below here to signal a turn lower.

Gold chart

Brent supported by the weak dollar

The bounce for Brent back above the 200-day simple moving average continues, with the weak US dollar helping to boost commodity prices in general.

A move upwards from here would target $53.11, the weekly pivot, and then on to the $53.94 level. The areas to watch for support would be $51.55, $50.92 and then $50.34. The price action in any dip should be carefully watched, but for the moment it looks like the buyers have the upper hand. 

Brent chart

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

This information/research prepared by IGA or IGA Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. 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. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

See important Research Disclaimer.