Technical analysis: key levels for gold and crude

Gold continues to stutter, while oil is drifting back from recent highs. 

Source: Bloomberg

Gold eyes $1240

Last week’s spike higher looks increasingly like an aberration in the general trend here. The $1240 mark is providing some support for the price but if this is broken (and then $1230, the lows from last week) then the risk is that the price undergoes a more significant reversal to $1200.

Some may opt to play the range for a possible bounce in the direction of $1270 or even $1280, but only a break above the latter restores the general uptrend for gold.

WTI could find support at 200-hour SMA

A modest pullback from the highs of last week is underway, but it leaves the broader uptrend intact. Support is possible around $39 (and the 200-hour simple moving average just below this) and then on towards the Tuesday low around $36.

A move to the latter would firmly break the rising daily trendline, but it might be that we see another bounce from here.

Only sustained price action below $35 really turns the outlook bearish for WTI.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. 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. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money. Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.