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CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

Technical analysis: key levels for gold and crude

A drop in the dollar has proved to be a boon for commodity bulls.

Smelted gold
Source: Bloomberg

Gold rally set to continue

The metal has enjoyed a remarkable rally since the end of December, gaining almost 7%, and so far there is little sign of it stopping. Indeed, with the dollar now weakening significantly we may be on the cusp of bigger gains.

The next areas of potential resistance are $1207 and then $1228. It is likely that a bearish move will necessitate a drop through $1190. 

Gold price chart

WTI aided by dollar drop

The dollar’s drop has rescued oil from further declines, with a recovery back above $51.70 and $52 indicating that more gains are likely.

A move through $53.70 would open the way to $54.53 and then $55.68. 

WTI price chart

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CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.

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