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Analysis | Commodity Technical Analysis | Written by HY Markets | Fri Sep 01 17 04:47 ET


Spot gold regained the upside after US inflation failed to impress, trimming all of its previous two days' losses to settle a few cents below the $1,320.00 level. The US core PCE inflation, Fed's favorite inflation gauge remained unchanged yearly basis at 1.4% in July, well below the Central Bank's target of 2.0%. The commodity is ending August roughly 4% higher, and at its highest since November 2016, when it run briefly up to 1,337.35, on the back of Trump's victory in the US Presidential election. The US inflation figure released today reaffirms the case for a delay in US rate hikes, underpinning the metal. From a technical point of view, the daily chart shows tat technical indicators resumed their advance with the Momentum heading strongly up at fresh August highs, whilst the 20 DMA accelerated north far below the current level, all of which supports further gains for this Friday, particularly if US employment report disappoints. In the shorter term, the technical outlook is also positive, as the 4 hours chart for the commodity shows that it quickly recovered above a bullish 20 SMA, while technical indicators entered positive territory, but quickly lost upward strength, with the Momentum now in neutral territory. An extension beyond 1,325.94, this month high, will confirm the bullish continuation for this last day of the week.

Support levels: 1,333.60 1,304.95 1,296.75

Resistance levels: 1,325.94 1,333.10 1,337.35


Crude oil prices changed course this Thursday, surging to their highest in three days, backed by news indicating that the US Department of Energy approved a crude loan to Phillips 66's Westlake refinery in Lake Charles, Louisiana, to balance Hurricane Harvey's supply disruptions. A total of 1 million barrels will be sent to the refinery during the next few days. Adding to the bullish case of the commodity, were news indicating that OPEC oil output fell in August by 170,000 barrels per day, from a 2017 high, help by Libya's output disruptions. West Texas Intermediate crude futures ended the day a few cents above $47.00 a barrel, and the daily chart shows that the intraday advance stalled right below the 100 DMA, at 47.25, while technical indicators have turned higher but remain in negative territory, all of which limits chances of further gains as long as the price remains below the mentioned resistance. In the 4 hours chart, the price remains below its 100 and 200 SMAs, while technical indicators entered positive territory, but the RSI lost upward momentum and is turning lower around 56, also indicating a limited upward potential at the time being.

Support levels: 46.60 45.90 45.50

Resistance levels: 47.25 47.70 48.40


US equities ended the day and the month higher, with the Dow Jones Industrial Average adding 60 points on the day, to end at 21,952.35, and up for around 0.3% in the month. The Nasdaq Composite settled at 6,428.66 a new record high, adding this Thursday 60 points and 1.3% higher for August. Finally, the S&P settled at 2,471.65, up 14 points for the day, and by 0.1% for the month. El du Pont was the best performer among the Dow, backed by a rally in oil prices, adding 1.63%, followed by United Health Group, which gained 1.54%. Wall Disney led decliners, closing the day 1.63% lower, followed by Wall-Mart Stores that shed 0.60%. The index is up for a fifth consecutive month, but marginally, and saved at the last minute by hopes the US tax reform will come sooner than later. From a technical point of view, and according to the daily chart, the index seems poised to extend its advance, as it advanced further above its 20 SMA, while the RSI indicator aims higher around 57. The Momentum, however, struggles below its mid-line, failing to confirm further gains ahead. Shorter term, and according to the 4 hours chart, the index extended its advance above all of its moving averages, with the shorter one, the 20 SMA aiming to advance above the larger ones, a sign of bullish continuation, and whit technical indicators holding near overbought readings, also in line with additional advances.

Support levels: 21,940 21,900 21,863

Resistance levels: 21,986 22,007 22,048


The FTSE 100 ended the day at 7,430.62, up by 66 points as Chinese strong PMIs boosted the mining sector. The index logged a monthly 0.8% gain helped additional by Pound's weakness. The official Chinese manufacturing PMI rose to 51.7 in August from the previous month’s 51.4, indicating a pickup in the sector, and anticipating increasing demand for base metals. Mediclinic International added 2.89%, leading advancers, followed by Anglo American that gained 2.82%. Losers were led by G4S that shed 2.01%, followed by Provident Financial that lost 1.01%. The technical picture is now more constructive, as in the daily chart, the index settled above all its 20 and 100 moving averages, while technical indicators entered positive territory, maintaining their bullish slopes and supporting additional advances for this Friday. In the shorter term, and according to the 4 hours chart, the index surpassed all of its moving averages, but technical indicators stand directionless within positive territory, as the index was unable to surpass the strong resistance around 7,444, a level that capped advances since early August.

Support levels: 7,395 7,348 7,313

Resistance levels: 7,444 7,480 7,523


European equities extended their recovery this Thursday, with the German DAX ending the day at 12,055.84, up in the day for 53 points. Strong EU inflation figures underpinned investors' mood, advancing 1.5% when compared to August 2016, and with the core reading up by 1.3%, matching July's figure, but above market's expectations of 1.2%. Within the German index, Deutsche Lufthansa was the best performer, adding 3.05%, followed by Heidelberg Cement that added 2.35%. The worst performer on the other hand was Continental, down 1.25%, followed by Daimler that shed 0.63%. The daily chart for the benchmark indicates that it recovered above its 200 DMA, but it´s still far below the shorter ones, while the Momentum indicator is flat around its 100 level, while the RSI aims higher, but around 43, limiting the upward potential, at least as long as it holds below 12,142, where the index has its 20 DMA. In the 4 hours chart, the index was unable to settle above a bearish 20 SMA, whilst technical indicator retreat from around their mid-lines, indicating that the short-term risk is towards the downside.

Support levels: 12,033 11,995 11,969

Resistance levels: 12,105 12,142 12,197

HY Markets


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