Technical analysis: key levels for gold and crude

A rally in oil prices has finally materialised, while the revival of risk appetite has left gold looking friendless.

Gold bars
Source: Bloomberg

Gold looks like it may struggle
Having spent the past three days stuck between $1100 and then $1095, the price is now heading towards the bottom end of the range. Thursday’s lows around $1094/$1095 may provide some support, otherwise we are looking at a move back towards $1085 and then $1080. With risk appetite back in action gold may struggle, but a move above $1105 would target the January highs at $1110.

Brent finally bounces
The bounce in oil that many have been waiting for is underway, with the price of Brent back above $30. Upside targets now come into view around $31.35 and then $32.97, while if the bulls really get going the key support in December around $36 will come into play as resistance.

Given the fundamental outlook, this bounce is not likely to be anything more than a retracement in the trend, but sellers will want to wait until the price gets back below $30 to signal that the bounce has run its course.

WTI rally continues
The rally has entered a second day, with the price targeting $31.36 and then $32.73. A sharply rising hourly trendline suggests support might be found around $30.50, but even if this does not hold the $29.50 area could still see buyers return.

A move back below $29 would be the cue for more downside, with the lows of the week around $27.50 in prospect. 

IGA, may distribute information/research produced by its respective foreign marketing partners 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.