Technical analysis: key levels for gold and crude

A rally in oil prices has finally materialised, while the revival of risk appetite has left gold looking friendless.

Gold bars
Source: Bloomberg

Gold looks like it may struggle
Having spent the past three days stuck between $1100 and then $1095, the price is now heading towards the bottom end of the range. Thursday’s lows around $1094/$1095 may provide some support, otherwise we are looking at a move back towards $1085 and then $1080. With risk appetite back in action gold may struggle, but a move above $1105 would target the January highs at $1110.

Brent finally bounces
The bounce in oil that many have been waiting for is underway, with the price of Brent back above $30. Upside targets now come into view around $31.35 and then $32.97, while if the bulls really get going the key support in December around $36 will come into play as resistance.

Given the fundamental outlook, this bounce is not likely to be anything more than a retracement in the trend, but sellers will want to wait until the price gets back below $30 to signal that the bounce has run its course.

WTI rally continues
The rally has entered a second day, with the price targeting $31.36 and then $32.73. A sharply rising hourly trendline suggests support might be found around $30.50, but even if this does not hold the $29.50 area could still see buyers return.

A move back below $29 would be the cue for more downside, with the lows of the week around $27.50 in prospect. 

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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.