Gold and Brent crude prices consolidate, as we await the next big move
Gold and Brent crude largely consolidate, yet further divergence is expected as gold await another leg higher.
Gold continues to consolidate despite wider market rebound
Gold volatility has completely collapsed, with the sharp gains seen in the early part of last week turning into a consolidation phase. Given the upside we are seeing in global stocks, the lack of any major downside in gold is encouraging.
With stocks expected to turn lower before long, this current pullback in gold looks like a buying opportunity given the potential upside that could come if stocks do start to reverse. As such, long positions are favoured within the 61.8%-76.4% zone ($1614-$1607), with this bullish outlook holding unless we see a break below the $1596 swing low.
Brent rallies into trendline resistance
Brent has managed to gain ground, with a discussion between US President Donald Trump and Russia President Vladimir Putin leading to plans for a meeting between the energy ministers from their respective countries. However, until something changes, the huge oversupply in oil remains a driver of bearish market sentiment.
The rally we have seen overnight has taken us into trendline resistance, with a break above this level required to bring about a rally into the wider Fibonacci resistance zone of $28.43-$29.17. Until that happens, there is a strong chance of further downside from here. Ultimately, we will need to see the $30.38 level broken to bring about a more consistent bullish picture for the price of Brent.
This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
Speculate on commodities
Trade commodity futures, as well as 27 commodity markets with no fixed expiries.1
- Wide range of popular and niche metals, energies and softs
- Spreads from 0.3 pts on Spot Gold, 2 pts on Spot Silver and 2.8 pts on Oil
- View continuous charting, backdated for up to five years
Live prices on most popular markets
- Forex
- Shares
- Indices
