Technical analysis: key levels for gold and crude

Gold bulls have sent the commodity flying higher, while oil is recovering from earlier losses.

Gold stages a breakout

We may well have seen the breakout for gold after months of indecision. The price has charged through the downtrend line from the April highs, closing above $1215 and crucial resistance.

Some weakness would be possible, even welcome, if it allows fresh longs to hop on board, with dips towards previous resistance (now support) at $1215 and $1205 possible. Gold seasonality is strong here into year end, while the small net short positions among speculators, according to Commitment of Traders (CoT) data, could combine to drive the price higher over the medium term.

WTI bounces from the lows

WTI has rallied off the lows of the week, having found support around $70.35.

Further gains from here target $72.88, $74.00 and then $74.95. A close below $70.34 would reinforce the idea that the sellers are back in control.

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