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Analysis | Commodity Technical Analysis | Written by HY Markets | Sun Jan 08 17 23:52 ET


Spot gold closed with solid gains for a second consecutive week at $1,172.86 a troy ounce, having traded as high as 1,184.86 on Thursday, its highest in over a month. Despite demand for US-related attests resumed after the release of the monthly employment report, gold held on to gains, somehow confirming an interim bottom at December's low of 1,122.62. Technically, the advance is still seen as corrective in the longer term, as the price settled around the 23.6%, retracement of the post-election decline, and the commodity is at risk of resuming its decline any time, particularly if confidence in the US and the greenback persists. In the daily chart, technical indicators have pulled back modestly after approaching overbought territory, while the price is well above a flat 20 SMA, all of which limits chances of a downward move. In the 4 hours chart, the price holds above a bullish 20 SMA that crossed above the 100 and 200 ones, whilst technical indicators having turned flat within positive territory, after correcting overbought conditions, in line with the longer term outlook.

Support levels: 1,173.10 1,165.20 1,156.15
Resistance levels: 1,179.20 1,184.90 1,191.30


Crude oil prices closed the week pretty much unchanged, with West Texas Intermediate futures settling at $53.68 a barrel, weighed by dollar's strength and despite positive news in the sector. After falling to 52.11 on Tuesday, the commodity bounced on news that the OPEC is compiling its commitment to reduce output, and a large draw-down in US crude stockpiles. The EIA reported that stockpiles decreased by 7.1 million barrels in the last week of the year, while people familiar with the matter, said that Saudi Arabia has cut its crude-oil production by at least by 486,000 barrels per day, while Kuwait also reduced oil production this January, to around 2.7 million barrels per day, last Friday. From a technical point of view, however, the black gold has continued to lose upward momentum, and seems to have entered a consolidative stage, as in the daily chart, the price is above a horizontal 20 SMA, whilst technical indicators show no directional strength, but hold within positive territory. In the 4 hours chart, the 20 and 100 SMAs converge around 53.30, while technical indicators have also turned flat within positive territory, suggesting further consolidation ahead.

Support levels: 53.30 52.60 51.90
Resistance levels: 54.20 55.00 55.75


Wall Street edged higher last Friday, with the Dow Jones Industrial Average coming within 0.37 points of 20,000 hitting 19,999.63 intraday, to close the week at 19,963.80, up by 64 points or 0.32%. The S&P 500 advanced roughly 8 points, or 0.35%, to 2,276.99, trading in record territory, whilst the Nasdaq Composite added 33 points or 0.60% to settle at 5,521.06. Looking beyond the negative headline of the US Nonfarm Payrolls report released on Friday, wages growth hit a new post-recession high, as average hourly earnings increased by 2.9% YoY. Nike was the best performer within the Dow, up by 1.60%, followed by Walt Disney, up by 1.49% and Goldman Sachs that gained 1.48%. The daily chart presents a modest upward potential, as the index is holding above a flat 20 DMA, but far above the 100 and 200 DMAs, whilst technical indicators turned modestly higher, but with no strength, and with the Momentum indicator still around 100. In the 4 hours chart, the 20 and 100 SMAs converge around 19,895, providing a major dynamic support, whilst technical indicators turned lower within positive territory, not enough to confirm an upcoming bearish move.

Support levels: 19,940 19,895 19,853
Resistance levels: 20,000 20,045 20,100

FTSE 100

The FTSE 100 posted its seventh consecutive record close, ending Friday at 7,210.05, up by 14 points or 0.20%. Having started the day in the red, the index benefited from a weaker Pound, while a recovery in the banking sector offset the poor performance on mining-related equities. The best performer was BAE Systems, up by 2.98%, followed by Lloyds Banking group that surged by 1.93%. Leading losers' list was Fresnillo, down 3.51%, followed by Randgold Resources that shed 2.83%. The Footsie maintains its bullish tone according to technical readings, as indicators resumed their advances, with modest upward slopes, within positive territory, while the benchmark advanced further above a bullish 20 DMA. In the 4 hours chart, the index remains well above a bullish 20 SMA, with buying interest still surging on approaches to it, and currently at 7,178, while technical indicators hold flat above their mid-lines, lacking upward momentum amid the limited intraday ranges seen lately.

Support levels: 7,178 7,146 7,110
Resistance levels: 7,229 7,260 7,295


European equities closed modestly higher on Friday, with the German DAX advancing 14 points to 11,599.01, undermined by poor German data, as new orders in manufacturing fell by 2.5% in November when compared to the previous month, while retail sales in the same month fell by 1.8% against expectations of a 06% decline. Among the DAX, bank equities recovered some ground, with Deutsche Bank closing up 0.60% and Commerzbank ending the day unchanged. From a technical point of view, however, the risk remains towards the upside, as the benchmark holds near the multi-year high posted last Tuesday at 11,650, and in the daily chart, the RSI indicator turned modestly higher around 75, whilst the Momentum holds within positive territory and the 20 DMA heads higher well below the current level. In the 4 hours chart, the neutral-to-bullish stance persists, with the index a few points above a modestly bullish 20 SMA, the Momentum indicator stuck around its 100 level and the RSI hovering around 62.

Support levels: 11,569 11,512 11,458
Resistance levels: 11,623 11,689 11,743

HY Markets


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