Technical analysis: key levels for gold and crude

Gold’s stellar rally has come to a juddering halt, while oil prices remain on a march lower. 

Oil rig
Source: Bloomberg

Gold

Gold’s sharp drop back below $1300 suggests that the rally of June has ended, and with both stochastics and relative strength index turning lower on the daily chart, the sellers may now have the upper hand.

A move below $1280 would then head towards $1255 and then $1236, the 50- and 100-day simple moving averages respectively. A bounce back above $1300 would restore some bullish momentum. 

WTI

The price remains stuck in a downtrend, without the sharp reversals seen in some markets. As a result, this may be just more of a bounce to be sold, and certainly any move below $47 would indicate that there is more downside to come.

At present the jury is still out on whether a bottom is in place, but if the price gets back above $49 we may have the foundations of a rally for WTI.

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.