Technical analysis: key levels for gold and crude

The dollar’s rise continues to hurt commodities, with no sign of bullish momentum returning. 

Gold bars
Source: Bloomberg

Gold descent continues

The fall goes on here, but the price is now close to the $1200 level, which was key support back in June. As long as the dollar continues to strengthen there seems little chance of a turnaround.

There is some potential support at $1190, but below here we could see a swift drop to $1070. Oversold conditions persist, but we’ll need a move above $1230 to confirm a bounce is in play.

Gold price chart

Brent falters at 200-day SMA

The rally faltered at the 200-day simple moving average (SMA), and it now looks as if we could be about to retest $45.35 and then $44.10.

A rally must clear $48, which would open the way to $50.75. Below $44 the price could move towards the August lows at $41.50.

Brent crude price chart

WTI may drop to $44

Here too the price is under pressure, and unless it recovers the 200-day SMA at $46.20, we could see a drop back towards $44, which could then see a further drop to $40, last seen in early August. Above $46.20 the index would head towards $47.89, the 50-day SMA. 

WTI crude price 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.