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Saturday, November 22, 2014

Gold and oil analysis

Gold and oil have been trending lower for quite a while. From fundamental point of view I see a lot of politics going on with both commodities. Due to annexation of Crimean and turmoil in Ukraine Russia faced a lot of pressure from the West and one of the reasons for fall in oil prices could be just this. I can never be sure about it, but big boys definitely have means to push the price of oil or any other security. Of course, there are other reasons too. However, no trend continues forever. On the one hand we could see oil going to 60 bucks per barrel and stay at that level for quite a while. On the other hand, we could see gold bottoming in the area of 1000-900 per ounce. You should remember that gold is a currency as well as cash and in such troublesome times as these you should invest in gold. I mean you should possess it in physical forms. Silver is an alternative, of course, if you cannot afford buying gold. At some point, we might see nations collapsing economically due to debts in government sector.
For the time being, more pressure will be coming to both commodities. If you are a swing trader you should consider selling gold at resistance of 1220-1180 (previous support, now resistance) level down to 1000 level. Selling pressure may come as early as the beginning of next week.
Now, oil is currently at resistance. The commodity ended the week at resistance and you might expect oil to start falling to new lows from these levels. We are in a downtrend and you should only sell rallies when downtrend is in progress. Price may do some topping process at these levels, but I am pretty sure that it will go through the floor sooner rather than later.
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