Technical analysis: key levels for gold and crude

Dollar weakness has done wonders for commodity prices, with gold and oil both surging. 

Crude oil pipe
Source: Bloomberg

Gold pushing up strongly

Gold recovered in spectacular form yesterday, recovering most of the losses of the past week, and pushing back above the vital $1220 level.

While it has pulled back from its overnight highs, it looks as if the momentum will carry the price high, with a potential first target at $1254. Above this $1260 and then $1271 come into play. Buyers came in to defend the $1195/$1200 area, so the bears would need to get the price back below here to signal a turn lower.

Brent supported by the weak dollar

The bounce for Brent back above the 200-day simple moving average continues, with the weak US dollar helping to boost commodity prices in general.

A move upwards from here would target $53.11, the weekly pivot, and then on to the $53.94 level. The areas to watch for support would be $51.55, $50.92 and then $50.34. The price action in any dip should be carefully watched, but for the moment it looks like the buyers have the upper hand. 

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