Technical analysis: key levels for gold and crude

The prospects of a Federal Reserve move in December have increased, putting gold longs on the back foot. 

An offshore oil rig
Source: Bloomberg

Gold unable to make progress

It has been almost a straight line move in gold over the past few weeks, with bounces back towards the 50-hour SMA ($1101) marking the limit of upward momentum and providing opportunities to sell on the rallies. Downward momentum should see the price move back towards the July/August low around $1080. It seems hard to imagine how gold can rally, but if it does $1100 is the first target, and then on to $1120. 

Brent supported by $47

The $47 mark continues to provide remarkable support here, with further support likely around $46.54. Only then can the bears be sure that they have the upper hand. Bounces back towards $50 may occur, but it will take a close above $51 to provide real solidity to any rally.

WTI eyes $44.10

With the early bounce this morning having faltered around $44.80, the next target is Friday’s low around $44.10, with a move through here clearing the way to the lows of late October near $42.60. Any bounce needs to clear the 50-hour SMA around $47.30, to allow another chance at resistance around $46.50 and then $48. 

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