Technical analysis: key levels for gold and crude

A stronger dollar does little for commodity prices, and this is what we have seen play out in the twelve hours since the Fed decision.

Oil pump at sunset
Source: Bloomberg

Gold hit by hawkish Fed

Unsurprisingly, the Federal Reserve’s shift to a more hawkish stance for next year has done little for gold. The price tested the area around $1133 overnight, so this is the first area of support to watch. Any rally, which may still materialise despite last night’s meeting, would need to push on above $1160 to suggest consolidation rather than further losses are likely.

From here the price needs to clear $1170 and then $1180. Further weakness could see the price head towards $1122 and then $1106. 

Brent resting above key support

Brent crude oil prices have been moving lower all week from their gap up on Friday, and now find themselves resting above key support at $54. A move below here would target $52.55 and then $51.14. Bulls would want to see the price head back above $55, which would open the way to another test of $57. 

WTI to end 2016 on a low?

WTI's push below $52 suggests we are likely to see lower oil prices towards the end of the year. At present the price is oversold intraday, so a bounce could materialise, but overall it looks like a move below $50 is on the cards.

Potential support is possible around $51, $50.25 and then $48.94. A bounce has to get a daily close back above $52, which might then target $53 and $54.35. 

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