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Analysis | Commodity Technical Analysis | Written by HY Markets | Mon Jul 10 17 06:08 ET


Gold prices fell further on Friday, with spot ending the week at $1,212.15, its lowest settlement in four months, following a mixed US employment report. A strong jobs' creation was balanced with poor wages' growth, not enough to deviate the Fed's from its tightening path, albeit uncertainty remains strong on the case. US inflation data, to be released this week, can shed some light over the matter and determinate gold's trend. Also, denting sentiment towards the commodity is the latest flip in central banks' stance, now inclined to tighten their monetary policies. The technical picture for the safe-haven is bearish according to the daily chart, with the price having extended its decline below the 200 DMA and indicators heading south near oversold readings. Shorter term, the 4 hours chart shows that a bearish 20 SMA keeps capping the upside, currently at 1,222.10, while the RSI indicator has managed to correct partially oversold readings, while the Momentum indicator lost upward strength well below its mid-line.

Support levels: 1,207.24 1,198.20 1,189.90

Resistance levels: 1,222.10 1,228.00 1,236.50


Crude oil prices closed the week in the red, with West Texas Intermediate futures down to $44.33 a barrel, shedding roughly 3% this past week, amid persistent fears of a global glut, and news that Russia is not willing to back further OPEC's output cuts. US government data released last Thursday showed that, despite crude oil stockpiles fell by 6.3 million, oil production rose on1.0% to 9.34 million barrels per day. Additionally, the Baker Hughes report released on Friday showed that the number of US active rigs drilling for oil rose by 7 to 763 last week. The daily chart for WTI shows that the price settled below its 20 SMA, and around the 23.6% retracement of its latest bearish run, after correcting half of the decline in the previous week, increasing chances of a downward extension. In the same chart, the Momentum indicator holds flat within positive territory, but the RSI indicator also supports a downward move by heading south around 41. In the 4 hours chart, the price settled below all of its moving averages, while technical indicators bounced from oversold levels, heading higher within positive territory, not enough to support a recovery.

Support levels: 43.70 43.10 42.60

Resistance levels: 44.80 45.50 46.10


US indexes surged on Friday, ending the week with gains, helped the employment report released on Friday, indicating strong jobs' creation in June, and despite soft wages arise doubts over upcoming rate hikes. The Dow Jones Industrial Average added 94 points, to settle at 21,414.34, while the Nasdaq Composite gained 63 points, to 6,153.08. The S&P closed at 2,425.18, up 0.64%. Within the Dow, Goldman Sachs led decliners with a 0.62% loss, followed by General Electric that shed 0.61% and Chevron, this last hit by oil's decline. McDonald's led advancers, up 2.08%, followed by Nike that gained 1.43%. The daily chart for the DJIA shows that the index closed right around its 20 DMA, unable to recover above it, but far above the larger ones, whilst technical indicators turned higher within neutral territory. In the 4 hours chart, the advance was contained by the 20 and 100 SMAs, both converging around 21,420, whilst technical indicators recovered from oversold readings, but lost upward momentum below their mid-lines, limiting chances of a stronger advance in the short term.

Support levels: 21,366 21,305 21,278

Resistance levels: 21,420 21,459 21,515


The FTSE 100 found support in a weaker Pound last Friday, ending the day up 13 points or 0.19%, at 7,350.92. The mining sector edged lower on gold and silver weakness, with Fresnillo and Randgold Resources shedding over 1.0% each. EasyJet was the best performer, up 5.35%, followed by Centrica that added 2.87% on rumors of a takeover of the company. Royal mail led decliners, ending the day down 3.35%, while ITV shed 2.91%. The index remains biased lower according to technical readings, as in the daily chart, the recovery stalled below the 100 DMA while the 20 SMA extended its downward move above the largest. Indicators in the mentioned chart remain within negative territory with little directional strength. In the 4 hours chart, technical indicators have turned horizontal below their mid--lines, while the index settled a few points above a bullish 20 SMA, yet below the 100 and 200 SMAs, indicating limited buying interest.

Support levels: 7,327 7,294 7,256

Resistance levels: 7,372 7,424 7,452


European equities closed mostly lower on Friday, as persistent weakness in oil prices weighed, although the German DAX managed to close the day at 12,388.68, up by 7 points. Speculation that the easing monetary policy is getting closer to an end, undermined investors' confidence despite the economic recovery, indicating that stocks may remain under pressure this week. Within the German benchmark, ProSiebenSat.1 led decliners for a second consecutive session, down 1.29%, and followed by Commerzbank that shed 0.52%. RWE AG was the best performer, up 3.72%, followed by E.ON that added 2.55%. The index has held once again above a bullish 100 DMA in the daily chart, but remains nearby, and with technical indicators holding near oversold readings, which increase the risk of further declines ahead. In the 4 hours chart, the latest recovery was contained by a now flat 20 SMA, with the index holding around it, while technical indicators consolidate below their mid-lines, limiting chances of a steeper recovery. The index bottomed at 12,310 this past week, the level to break to confirm a new leg lower.

Support levels: 12,366 12,310 12,272

Resistance levels: 12,445 12,490 12,536

HY Markets


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