Gold and Crude Oil: A Quick Look

By March 1, 2013General

There were some requests from readers to follow-up on a previous post on Gold and some bigger picture comments on Crude. Pls see below for a quick analysis in broader terms that might help in generating some trade ideas. If you are looking for trade ideas, try our Income from future options service FREE for 15 days.


More than a year ago, Gold prices hit all-time high around 1920 USD per troy oz (Sept 2011) and have been consolidating ever since, ranging mostly between 1520 and 1800 regions. Looking back at the consolidation period since early 2012, Gold prices seems to be very well supported around 1560 regions, below which Gold prices will get a strong buying pressure that will push the price back higher. The lowest level recorded since the all-time high was on May last year at 1527 regions.

Back in October last year, we saw a retest of resistance level around 1800 regions, followed by a bearish trend which bring Gold prices to below 1560 regions last week with a quick rebound. I think the recoil from 1560 level is quite solid and though there may be another lower retest, Gold prices will need a very strong momentum down to break the support zone that extends to at least 1530 regions.

Going forward, Gold prices are likely to consolidate with slight bullish bias. Breaking above 1620 regions may signal a possible bullish rally to 1800, but I think Gold prices will need to build momentum first, just like what happened in June and July last year. This however will be invalidated once Gold prices pierce strongly below 1500.00 level, which I doubt will be the case.

(If you are looking for trade ideas, try our Income from future options service FREE for 15 days )



There are several benchmark for Crude Oil prices, but the two most important ones are the West Texas Intermediate (WTI) and Brent Crude Oil. WTI Crude Oil is used mostly within U.S. and Brent Crude Oil is mainly used by European market. In terms of specification, both are considered as high-grade light-sweet crude oil, although WTI is of higher standard (and interestingly cheaper prices).

Recently the price movement of WTI Crude has been a ride of roller-coaster, with high level of volatility and lots of impact from the fundamental factors. However, from long-term perspective, both technical and fundamental, WTI Crude prices are consolidating and balanced by several factors like global economic slowdown and geopolitical tension in Middle East.

Currently WTI Crude prices are strongly capped by resistance at 98 regions, with the next resistance at 100 serving as psychological barrier and a strong glass ceiling for bull. Furthermore, we saw a strong bearish move last week after few weeks of consolidation with the resistance at 98 regions left intact, giving a stronger argument for bearish momentum in play, with downside potential may likely hit 88 regions.

If you are looking for trade ideas, try our Income from future options service FREE for 15 days.

Was this article helpful to you?
Our free newsletter is full of powerful ideas to help you lead a smarter financial life.

About Wahyu PY

Leave a Reply


DISCLAIMER AND NOTICES: None of OptionPundit or any of its officers, directors, employees, other personnel, representatives, agents or independent contractors is, in such capacities, a licensed financial advisor, a registered investment adviser or a registered broker/dealer. Options involve risk and are not suitable for all investors. All investors who deal with options should read and understand the publication "Characteristics and Risks of Standardized Options." A copy of this publication can be obtained by clicking on this link. OptionPundit does not promise, guarantee or imply verbally or in writing that anything taught through our newsletter, in any printed material, or displayed on our website will necessarily result in a profit. OptionPundit is the copyright owner of all text and graphics contained on this website. Copying, publishing or redistributing any material in any way without the written consent of OptionPundit is strictly prohibited.The owners, publishers, and agents of OptionPundit are not liable for any losses or damages, monetary or other that may result from the application of information contained within this website and/or newsletter. Within this website, we publish materials that meet specific criteria representing characteristics associated with described trading strategies. Individual traders must do their own due diligence in analyzing featured options to determine if they represent a suitable opportunity. OptionPundit and any of their agents, affiliates, representatives, employees, principals, business associates or affiliates, partners or independent contractors are not responsible for any losses or profits that may result from the application of information contained within this website and/or newsletter. Past performance is not indicative of future results. Option trading involves substantial risk. You can lose money trading options. The past results posted on this site are meant to give you a reasonable idea of what you could have made or lost trading by following the OptionPundit service but are in no way an exact reflection of what you would have made or lost. Therefore, you should not rely on our past trade results as a perfect replication of what your returns or losses would have been by following our service. There are inherent risks involved in the stock market and these risks should be considered prior to any decision. The representatives of OptionPundit may or may not hold a position in any stocks listed at the time of publication and reserve the right to buy or sell any security, option, future or derivative product without notification. Nothing published by OptionPundit should be considered personalized investment advice. Although the OptionPundit team may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by the OptionPundit team to you should be deemed as personalized investment advice. OptionPundit products are delivered electronically by email and by access to a membership area where trade alerts and special alerts are posted. ©2015 OptionPundit. All rights reserved. Terms of use apply. Reproduction, adaptation, distribution, public display, exhibition for profit, or storage in any electronic storage media in whole or in part is prohibited under penalty of law.