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Technical analysis: key levels for gold and crude

Gold may well have found a bottom for now, while oil’s recent burst of strength goes on.

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Gold smelter
Source: Bloomberg

Gold downtrend at an end?

The price has halted its decline just above $1200, so we may be seeing an end to this leg of the downtrend.

A rally could take the price back to $1250 or even to the 200-day simple moving average (SMA) at $1280, provided we see a push above $1230.

If $1200 is broken the next area for real support could be as low as $1100-$1110.

Brent may show signs of weakness

Oil has rallied impressively off the lows, but while it is above the 200-day SMA ($47.71) it has still to break $50 to get back above the rising 2016 trend.

With the price now overbought intraday we could see some weakness, but this could provide another buying opportunity. It would need a move below $46 to suggest a downtrend is beginning.

WTI  buyers in control — for now

This commodity has hit the trendline from below once again, so now it needs to move above the $48 area to maintain momentum.

As with Brent, we could see a dip from intraday overbought levels, but for now the buyers look to have the upper hand.

Above $48 the price will head towards $49.53 and then $52.05. Bears will need to get the price back below $45. 

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