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Analysis | Commodity Technical Analysis | Written by HY Markets | Tue Jan 10 17 23:07 ET


Gold prices kept advancing this Tuesday, with spot reaching 1,190.50, its highest since November 30th, to settle at $1,186.70 a troy ounce by the end of the US afternoon. The soft tone of the US currency has kept the commodity underpinned ever since it bottomed near $1,100 a troy ounce last December, but even after rising to a fresh six weeks´ high, the movement is seen as corrective, and further gains are not yet clear, particularly if Trump delivers in its first days at the office. Uncertainty ahead of the policies the upcoming US president will apply, and how they would affect the world's largest economy, is the only reason of gold´s gains. From a technical point of view, the daily chart presents a clear upward potential, as indicators continue rallying within positive territory, whilst the 20 SMA is turning higher far below the current level. In the 4 hours chart, technical indicators have partially lost their bullish strength, but remain within positive territory, while buying interest is still surging on declines towards a bullish 20 SMA, currently at 1,179.50.

Support levels: 1,179.50 1,173.10 1,165.20
Resistance levels: 1,190.50 1,197.20 1,208.00


Crude oil prices broke lower, with West Texas Intermediate futures down 2% daily basis, to a fresh 1-month low of $50.78 a barrel, as a stronger dollar added to rising concerns over OPEC and non-OPEC compliance with the deal sealed last year to trim oil production. Monday's news reporting that Iraq will raise its crude export to all-time highs in February, overshadowed the positive developments in non-OPEC countries, as Russia and Kazakhstan announced they’ve met or exceeded their initial goals for trimming oil output. The price has clearly broken below the critical 52.00 level, and is poised to extend its decline according to the daily chart, as technical indicators have accelerated their declines within bearish territory, whilst the price is now well below its 20 DMA. In the same chart, the 100 DMA offers a strong dynamic support at 49.05, with a break below it exposing the commodity to a full retracement towards the base of its latest range at 45.00. In the 4 hours chart, technical indicators have turned flat within oversold territory, with no signs of changing bias, whilst the price is now below all of its moving averages, with the 20 SMA breaking below the 100 SMA, far above the current level, in line with the longer term perspective.

Support levels: 50.80 50.30 49.50
Resistance levels: 51.60 52.20 52.80


US stocks closed mixed, with the Dow Jones Industrial Average turning lower in the last hour of trading, and closing at 19,855.53 down by 31 points. The S&P ended flat at 2,268.90, while the Nasdaq posted its third straight record close, up by 20 points to 5,551.82. Investors turned cautious ahead of a press conference by US President-elect, Donald Trump, scheduled for this Wednesday, moreover after the FED acknowledge the uncertainty related to his upcoming mandate. From a technical point of view, the daily chart for the Dow shows that the index opened and closed below its 20 DMA, while technical indicators continued grinding lower, the Momentum around its 100 level and the RSI at 57, not enough to confirm further slide. In the shorter term, and according to the 4 hours chart, the index remains below its 20 and 100 SMAs, both horizontal a few points above the current level, while technical indicators have gained bearish strength within negative territory, anticipating some further slides on a break below 19,837, the daily low and the immediate support.

Support levels: 19,837 19,787 19,715
Resistance levels: 19,920 19,985 20,045

FTSE 100

Footsie's rally to record highs continued this Tuesday, with the benchmark up 37 points or 0.52% to close at 7,275.47, helped by Pound's continued weakness. It was the ninth consecutive record-high close and the 11th consecutive daily gain, the longest winning streak in almost eight years. Higher base metals' prices, also helped the index, with Anglo American nailing a 9.03% gain, followed by Rio Tinto that added 6.41% and Fresnillo which added 4.53%. In the daily chart, the rally is beginning to look overstretched, as the RSI indicator heads north around 77, although the Momentum indicator presents a moderate upward potential, pretty much flat within positive territory. In the 4 hours chart, a bullish 20 SMA, continues advancing below the current level, while the RSI pulled back modestly, but remains in overbought territory, at 73, while the Momentum indicator is also flat, due to the limited intraday range seen lately. The risk of a downward corrective has become high, yet as long as the Pound remains under pressure, declines will likely be limited.

Support levels: 7,244 7,178 7,146
Resistance levels: 7,286 7,330 7,365


European equities closed the day with modest gains, with the German DAX up 19 points or 0.17%, to 11,583.30, as market's mood improved following the release of Chinese inflation figures. Banks remained under pressure, with Deutsche Bank leading losers' list, down by 1.71% and Commerzbank down by 0.04%. Continental was the best performer, up by 2.74%. Automakers and mining-related equities, on the other hand, rose, offsetting the negative tone in the banking sector. From a technical point of view, the daily chart for the DAX shows that the index remains above its 20 DMA, whilst the RSI indicator holds flat around 70 and the Momentum keeps grinding lower within positive territory, reflecting the ongoing consolidative stage rather than anticipating upcoming direction. In the 4 hours chart, the index is still neutral, with indicators heading nowhere around their mid-lines, and hovering around a flat 20 SMA.

Support levels: 11,512 11,458 11,402
Resistance levels: 11,606 11,650 11,698

HY Markets


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