Technical analysis: key levels for gold and crude

Gold has been hit hard this morning, while oil’s steady downtrend is now at a crossroads. 

Source: Bloomberg

Gold looking unsure

The nascent gold rally has taken a nasty knock, dropping back rapidly from $1257 and the 50-day simple moving average (SMA), but finding buyers around $1235 and the 200-day SMA.

A close below $1240 would negate the positive outlook created last week, and open the way to $1214 and then $1195. If the buyers can hold $1240, we may see a resurgence, but for now the picture is quite uncertain.

WTI working hard to bounce

The recovery of $42.80 last week, following a dip beneath it, lends strength to the idea that a bounce is still in progress. However, the four-hour chart shows that the sequence of lower highs has not yet been broken. This would require a move above $44, and the 50-period SMA on this chart that has, until now, done sterling service as a trendline.

For now, it is probably too early to call an end to the slump, but a turn could be at hand. WTI will bear careful watching over the next few days. 

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