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Analysis | Commodity Technical Analysis | Written by HY Markets | Mon Jan 09 17 22:53 ET


Gold prices extended their gains to a fresh 6-week high this Monday, quoting as high as $1,186.09 a troy ounce and ending the day not far below it. The bright metal trimmed post-Payroll losses, and despite the advance is being moderated by speculation of a faster pace of rate hikes in the US, the rally could extend over the next few sessions. The buying potential is being backed by physical demand and technical readings, as in the daily chart, buying interest around the 23.6% retracement of the latest daily slump contains the downside, whilst the price extended far above its 20 SMA, and technical indicators have advanced to fresh 2-month highs within positive territory. In the 4 hours chart, the 20 SMA has continued to provide an intraday dynamic support, and maintains its upward strength below the current level, while the RSI indicator heads north around 67, also supporting further gains. The Momentum indicator, however, is drawing a bearish divergence that still needs to be confirmed, pressuring the 100 level after being able to extend its advance between positive territory.

Support levels: 1,173.10 1,165.20 1,156.15
Resistance levels: 1,186.10 1,197.20 1,208.00


Crude oil prices fell to almost one-month low, with West Texas Intermediate futures below $52.00 a barrel for the first time since December 16th. News that Iraq, OPEC's second-largest producer reached an export record high of 3.51 million barrels per day in December, dented investors confidence in the organization's deal to cut production. Iraq's oil ministry later declared that the record production won't affect the country's decision to lower its production in January, but investors turn quickly skeptical when it comes to the OPEC. Hovering around $51.90 a barrel, the daily chart for WTI shows that the price has broken below a now flat 20 SMA, whilst technical indicators have turned lower, entering bearish territory and anticipating some further slides. In the 4 hours chart, the price has extended below its 20 and 100 SMAs, both lacking directional strength and around the 53.00/53.30 region, while technical indicators present strong bearish slopes near oversold territory, favoring a new leg lower on a break below 51.55, the immediate support.

Support levels: 51.55 50.80 50.30
Resistance levels: 52.60 53.30 54.10


Wall Street closed mixed, with the DJIA down 76 points or 0.38%, to close at 19.887, 38, and the S&P down 8 points to 2,268.90. The Nasdaq hit an all-time high of 5,541.08 before closing at 5,531.82, up by 10 points. A sharp decline in oil prices led energy companies lower, weighing on the Dow. Exxon Mobil closed 1.65% lower, the worst performer within the Dow, while Merck led gainers' list, up by 1.38%. The Dow is poised to extend its decline at least short term, as in the daily chart, the benchmark is now pressuring a horizontal 20 DMA, while technical indicators have turned lower, the Momentum indicator still around its 100 level, and the RSI heading south around 59. In the shorter term, and according to the 4 hours chart, the Dow presents a moderate downward potential, as the index is below its 20 SMA and currently breaking below the 100 SMA, whilst technical indicators are hovering around their mid-lines, with no certain directional strength.

Support levels: 19,853 19,806 19,758
Resistance levels: 19,943 20,000 20,045

FTSE 100

The FTSE 100 closed at another record high of 7,237.77, up by 27 points or 0.38%, helped by an advance in the mining sector, and a weaker Pound that usually boost the profits of the many multinational companies listed on the Footsie. Glencore was the best performer, up by 3.55%, followed by Randgold Resources that gained 2.23%. Capita led losers' list, down by 2.91%. The daily chart shows that the index maintains the positive tone seen on previous updates, given that the RSI indicator keeps heading north around 75, whilst the Footsie develops well above all of its moving averages. The Momentum indicator in the mentioned time frame has turned modestly lower within positive territory, rather reflecting the limited intraday range than suggesting upward exhaustion. In the 4 hours chart, the 20 SMA keeps heading higher below the current level, while the technical indicators lack directional strength, but hold within positive territory, in line with the larger term perspective.

Support levels: 7,178 7,146 7,110
Resistance levels: 7,239 7,270 7,320


The German DAX shed 35 points this Monday, to close at 11,563.99, with most European equity benchmarks closing lower. UK's Theresa May comments about leaving the EU spurred demand for safe-haven assets, weighing on local stocks. Banking stocks were mostly in the red, with Deutsche Bank shedding 3.26% and Commerzbank 1.98% within the DAX. The decline was offset by gains in mining and automakers, with Volkswagen leading the German index higher, up by 4.47%. Technically, the daily chart for the DAX shows that it held within its last week's range, still above a bullish 20 SMA, and with the RSI indicator turning south around 70, indicating a possible downward corrective movement ahead. In the same chart, the Momentum indicator heads steadily lower above its 100 level, but with limited downward strength. In the 4 hours chart, the index retains the neutral stance seen on previous updates, standing a few points below a horizontal 20 SMA, and with technical indicators heading nowhere around their mid-lines.

Support levels: 11,512 11,458 11,402
Resistance levels: 11,581 11,623 11,689

HY Markets


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