Technical analysis: key levels for gold and crude

A weakening dollar has proved to be a boon for commodity prices, which are moving higher once again.

Gold bars
Source: Bloomberg

Gold
After two days of losses gold has recovered, with a test of the $1307 area yesterday seeing fresh buying momentum. Now the price needs to push above $1340 in short order to confirm that more gains are on the way.

As before, a drop through $1307 and then $1300 would raise the risk of a move back to $1263 and the 50-day simple moving average (SMA).

Gold daily chart

Brent
The bounce is still intact here for Brent, and if we can close above $50 today then the way looks clear to test $51 and then the June high at $52.80.

It has proven unwise to underestimate this rally, which has continued despite Brexit. However, it now needs to create a fresh high above $53 to indicate that the consolidation has run its course. 

Brent daily chart

WTI
A move through the key $48.50 area will confirm there is more to come, with the next areas to watch being $50 and then the June high around $51.50.

As with Brent, we need to see fresh highs for the year to indicate the uptrend is still intact. For now the price is likely to push higher, given the double bounce this month off the $46.40 area. 

WTI daily chart

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This information has been prepared by IG, a trading name of IG Markets Limited and IG Markets South Africa 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. International accounts are offered by IG Markets Limited in the UK (FCA Number 195355), a juristic representative of IG Markets South Africa Limited (FSP No 41393). South African residents are required to obtain the necessary tax clearance certificates in line with their foreign investment allowance and may not use credit or debit cards to fund their international account.