Technical analysis: key levels for gold and crude

Oil looks to be on the up once more, but gold’s surge to $1300 and beyond has come to an ugly halt. 

Oil pipework
Source: Bloomberg

Gold could see $1250

As risk assets rally across the board, gold has been dumped unceremoniously from its position above $1300. The attempt to hold above the 50-day simple moving average (SMA) at $1297 has failed, so now we look to see if downward momentum continues, with $1260 and then $1250 focus.

A daily close back above $1310 is now needed before we can say that the buyers are back in charge.

Brent could target 200-day SMA

Talk of Russia falling into line with OPEC has boosted oil prices, while the general recovery in risk assets related to the US election has also helped the commodity to rally. 

In Brent, a base appears to have formed in the $45-$46 region, so further progress above here will target the 200-day SMA at $47.38.

A breach of $45 to the downside would raise the risk of a drop to $43.60 and then $41.64.

WTI could drop to $39.60

Although still below its uptrend for the year, the recovery here could be a buying opportunity, assuming no significant disruption relating to the election.

Having held above the late September lows of $44.30 the price now needs to get back above $46 to recover the 2016 uptrend, and then go on towards $49.50.

A drop through $44.30 would then test $43.08, and then move on to $39.60 for WTI.

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