News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
EUR/USD
Bullish
Oil - US Crude
Bearish
Wall Street
Mixed
Gold
Mixed
GBP/USD
Mixed
USD/JPY
Mixed
More View more
Technical Focus: Gold Price versus Black Gold (Crude Oil)

Technical Focus: Gold Price versus Black Gold (Crude Oil)

2017-04-04 21:30:00
Jamie Saettele, CMT, Sr. Technical Strategist
Share:

Yellow gold or black gold? Crude has rallied about 9% from trendline support (see here) and gold continues to press against its 200 day average.

Crude has more of a structure to it than gold from my vantage point. The mentioned trendline and recent COT revelations (extreme selling a few weeks ago into the low) make for a decent bullish case. Near term expectations are tempered by the presence of the 2/8 low at 51.25 and a proposed short term trendline and 55 day average that is slightly higher. In other words, crude faces its first test since the lows last week. Don’t be surprised to see a period of ‘back and fill’ but the broader constructive outlook remains.

I’ve been looking for a gold drop into 1220 to turn bullish on a tactical basis but the metal remains stubbornly higher. In fact, gold has been at resistance (1250) for most of the last 3 weeks. The 200 day average is clearly important (tested and failed 3 times so far in 2017) but a push through the average would shift focus to 1278 (61.8% retracement from 2016 decline). If gold comes off now, then 1220 (resistance in January and support in February) should still be watched for support. A break above 1278, which is also the 2011-2012 trendline, would indicate a major change in behavior.

Finally, an analysis of the crude/gold ratio suggests that crude is in a better technical position. The 200 day average has provided support since August 2016 and the turn higher in late March confirmed a trendline.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES