Technical analysis: key levels for gold and crude

Gold is struggling to hold its ground this morning, while oil prices are looking to drop back once again.

Oil barrels
Source: Bloomberg

Gold firmly in the hands of the sellers
A sharp drop from Friday’s close leaves the metal trading within its relatively narrow consolidation range. A break below $1275 would suggest the sellers are still in charge, with a target down around $1250, and then on to the 50-day simple moving average (SMA) at $1248.

Bulls need to see a break higher and a close above $1295 to see the metal regain its upward momentum. 

Brent rally slows
Despite a move higher, the rally here looks to be running out of steam. However, bears need to get below $44.50 to confirm more downside is on the way, since this area has been vital support over the past few sessions.

It may however be that we are seeing oil prices stabilise, with any move through $47 certainly looking like a first step in a new leg higher. 

WTI to challenge $46
If the price fails to push on above $46 then we may see a fresh move back towards $44 and then down to key support at $42.60.

A daily close above $46 would indicate the price is moving higher once again, with a move to $48.30 and the early November high a possibility. 

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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.