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Technical analysis: key levels for gold and crude

Gold is under real pressure for the first time in weeks, while oil is rebounding after heavy losses yesterday. 

Oil pump
Source: Bloomberg

Gold price slumps, but selling opportunities have been sparse

The gold price has slumped below the rising trendline that has dominated since December. However, rallies have been short-lived intraday and have offered little opportunity for fresh selling, with the price sharply oversold over the past 18 hours. We would look for a move back towards $1240 and the 50-hour simple moving average for a more promising selling opportunity. 

Gold price chart

Brent bounce in progress

Yesterday’s sharp drop saw the Brent crude price drop to its lowest level in almost a month, but a small bounce is now in progress after the price fell to oversold levels intraday.

Buyers would need to reclaim $55.56 in the first instance, but if the price can’t get back above $56 the risk is that further selling will develop to send the price back to $54 and the lows of early January. 

Brent 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.