Commodities have become the focal point of investors yet again as global growth concerns continue to put a damper on risk appetite.

Let’s take a closer look at some of the commodities:

Gold

We have seen the precious metal gain momentum since November 2018 in a steady up trend (red line) to the 2019 highs of $1326/ oz. The price action is currently consolidating above the $1306/ oz with a possible bull flag forming which would suggest another leg higher. A possible higher target might be back to the recent highs of $1326/ oz.

• Also considering seasonality we might expect gold to push higher as traditionally February is a positive month for gold with an average return of 2%.

The price action is trading well above the 50-day Simple Moving Average (SMA) and a possible move lower to $1297/oz if the $1306/ oz support level does not hold.

Source – MetaTrader5

Brent Crude Oil

Looking back at our previous Commodity Report we can see that Brent Crude Oil is playing out as we expect. Still waiting on a daily close above the $64.16/ barrel which coincides with the 38.2 Fibonacci Retracement level. 

• The price action is trading well above the 50-day Simple Moving Average (SMA) (blue line) which support the move higher.
• Price action has broken the Inverse Head & Shoulders (IH&S) technical pattern which supports the reversal of the price action.

Source – MetaTrader5