Technical analysis: key levels for gold and crude

A weaker dollar following on from the Federal Reserve meeting has given the commodity complex the excuse it needed to rally, putting gold, brent and WTI on an upward path.

Mining
Source: Bloomberg

Gold moves higher

Yesterday’s Fed meeting sent gold moving sharply higher, pushing through the 13 September high around $1330, and leaving it well-positioned to head to the early September peak at $1355.

If the bounce continues then gold has avoided making a new lower low, and we could be seeing the beginning of a breakout from the downtrend off the July highs. The price is relatively overextended intraday, so we could see some short-term weakness, but any dips are likely to see fresh buying. 

Gold chart

Brent set for further gains

Having built a base above $45.60, the price has moved sharply higher, with the possibility of further gains ahead. If we see more upward moves then $48.80 would be the next target, and then on to $50.22.

It will take a firm close below $45 to indicate that the key support area of late August and September has been broken.

Brent chart

WTI looks to begin new upward leg

It looks increasingly likely that we will see a push towards $47.50, which would bring the price back into contact with the descending trendline off the June highs. WTI needs to break this to begin a new upward leg.

A failure to push on would see it fall back towards $44, and the rising trend from the lows of the year. The strong moves of the last few days have put the bulls in charge for now. 

WTI chart

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.

Find articles by analysts

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.