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Analysis | Commodity Technical Analysis | Written by HY Markets | Wed Aug 23 17 04:41 ET


Gold prices eased this Tuesday, with spot settling at $1,285.44 a troy ounce, and trimming most of its weekly gains as the dollar rallied on better markets' mood. Still marginally higher for the week, a clearer picture for gold may come on Thursday, when Fed's Yellen will offer a speech within the Jackson Hole Symposium. The head of the Federal Reserve is not expected to talk specifically about the ongoing monetary policy, but investors will be trying to read in-between lines, looking for clues on what's next, particularly on rate hikes. In the meantime, the daily chart indicates that the upward momentum eased, but also that the commodity is far from bearish territory, as technical indicators eased modestly, but remain well above their mid-lines, whilst the price is far above all of its moving averages. In the shorter term, and according to the 4 hours chart, gold maintains a neutral stance, trading slightly below a horizontal 20 SMA and with technical indicators hovering around their mid-lines.

Support levels: 1,281.65 1,273.95 1,261.20

Resistance levels: 1,292.10 1,300.90 1,309.25


Crude oil prices posted a modest advance this Tuesday, with WTI ending the day at $47.84 a barrel, helped by expectations of another crude stockpile draw-down in the US last week. According to a Reuters' poll, inventories are expected to have fallen by around 3.4 million barrels in the week ended August 18th. The advance, however, was limited by news that Libya's Sharara oil field was reopening after its latest shutdown. The API report, to be released late Tuesday, could give a first glance of what the EIA report will bring. The shallow daily bounce hasn't been enough to revert the negative tone seen on previous updates, as in the daily chart, the commodity has barely bounced from its 100 DMA, while technical indicators remain within bearish territory, but lacking directional strength. In the 4 hours chart, the 100 SMA is gaining downward traction above the current level, the RSI remains flat around its 50 level, whilst the Momentum indicator presents a strong downward slope within negative territory, all of which maintains the risk towards the downside.

Support levels: 47.20 46.60 45.90

Resistance levels: 48.20 48.80 49.50


Wall Street edged sharply higher this Tuesday, with the DJIA adding 196 points, its largest daily rally in four months, to end at 21,899,89. The Nasdaq Composite gained 1.36%, to close at 6,297.48, while the S&P settled at 2,452.51, up by 24 points. Speculation that the US administration will focus now on the long promised tax reform, woke up investor's appetite for equities, also getting support from a recovery in their overseas counterparts that rallied on the back or rising base metals. Only three members were down within the Dow, with Intel Corp. being the worst performer, down by 0.72%. Cisco Systems, on the other hand, led advancers, up 2.0%, followed by Caterpillar that added 1.95%. In the daily chart, the index pared its recovery a few points below a flat 20 DMA at 21,936, the immediate resistance, whilst technical indicators bounced from oversold levels, with the RSI indicator already entering positive territory, now at 54 and anticipating some further gains for this Wednesday. In the 4 hours chart, technical indicators lost upward strength near overbought territory, whilst the index ended well above its 20 and 200 SMAs, but below the 100 SMA, currently at 21.954.

Support levels: 21,880 21,836 21,790

Resistance levels: 21,936 21,970 22,011


The FTSE 100 closed the day at 7,381.74, up by 63 points, as an advance in mining-related equities offset large losses from insurance related equities. Provident Financial plunged 66.22% after issuing its second profit warning in three months, losing two thirds of its value. Tesco led the advance, adding 4.10%, while Rio Tinto, Glencore and BHP Billiton added over 2.0% each, also making it to the top ten list. The positive tone persists in after-hours trading on Wall Street's recovery, but the daily chart for the Footsie shows that technical indicators remain within bearish territory, with limited upward strength, whilst the 20 and 100 DMAs remain above the current level, not enough to confirm a bullish extension for this Wednesday. In the 4 hours chart, the index presents a modestly positive tone, as it settled above a horizontal 20 SMA while the Momentum indicator aims higher around its mid-line, and the RSI at 55.

Support levels: 7,353 7,309 7,271

Resistance levels: 7,401 7,444 7,482


European equities edged higher this Tuesday, reversing a three-day losing streak, with the German DAX adding 165 points to end at 12,229.34, amid a recovery in the mining and automotive sectors. Within the DAX, only Commerzbank closed in the red, shedding 0.29%, while Fresenius led advancers, adding 3.36%, followed by Linde which gained 2.96%. The daily chart for the index shows that it settled above its 20 DMA, while technical indicators have turned north, but still hovering around their mid-lines and barely above this month highs, not enough to indicate a bullish continuation for this Wednesday. In the 4 hours chart, the index recovered above its 20 and 100 SMAs, while technical indicators entered positive territory but lost upward strength, in line with the longer term perspective. Further gains beyond the 12,300 region where the index topped last week, will likely encourage bulls, resulting in a firmer upward movement this Wednesday.

Support levels: 12,212 12,176 12,131

Resistance levels: 12,263 12,301 12,343

HY Markets


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