Technical analysis: key levels for gold and crude

A weaker dollar following on from the Federal Reserve meeting has given the commodity complex the excuse it needed to rally, putting gold, brent and WTI on an upward path.

Source: Bloomberg

Gold moves higher

Yesterday’s Fed meeting sent gold moving sharply higher, pushing through the 13 September high around $1330, and leaving it well-positioned to head to the early September peak at $1355.

If the bounce continues then gold has avoided making a new lower low, and we could be seeing the beginning of a breakout from the downtrend off the July highs. The price is relatively overextended intraday, so we could see some short-term weakness, but any dips are likely to see fresh buying. 

Brent set for further gains

Having built a base above $45.60, the price has moved sharply higher, with the possibility of further gains ahead. If we see more upward moves then $48.80 would be the next target, and then on to $50.22.

It will take a firm close below $45 to indicate that the key support area of late August and September has been broken.

WTI looks to begin new upward leg

It looks increasingly likely that we will see a push towards $47.50, which would bring the price back into contact with the descending trendline off the June highs. WTI needs to break this to begin a new upward leg.

A failure to push on would see it fall back towards $44, and the rising trend from the lows of the year. The strong moves of the last few days have put the bulls in charge for now. 

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.