Technical analysis: key levels for gold and crude

Gold has held above yesterday’s lows, creating the potential for a bounce, but oil’s gains yesterday faded away into the afternoon, leaving the sellers in charge.

Oil plant
Source: Bloomberg

Gold pushes higher

Having stabilised yesterday the price has pushed higher once again, an indication that we may see another bounce. In this case, the target would be $1333, the 50-day simple moving average (SMA), and then the peak from the beginning of September at $1352.

The price needs to push above this level and break the downtrend off the 2016 highs to maintain momentum. The $1302 mark continues to provide possible support.

Gold chart

Brent set to drop

Despite an early move higher yesterday, Brent was unable to hold its gains. This makes it more likely that we will see a drop back to the previous support level at $45.30, while below this the 200-day SMA at $44.52 comes into view.

Gains yesterday and on 15 September fizzled out at $47.24, so any bounce in the near-term needs to clear this level. 

Brent chart

WTI struggles to make gains

Here too, the early bounce ran out of steam with the $44.70 area halting gains yesterday as it did last Thursday. Now we look to see if key support at $43.22 holds, which would lead to a rangebound situation for WTI, between $43.22 and $44.70.

Below $43.22, the price could test the $41.50 level or even the August low at $40. 

WTI 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.