Commodities report: gold and crude

The gold pullback looks like a great opportunity, while Brent crude seems to be leading US crude in a break higher.

Gold bars
Source: Bloomberg

Gold uptrend remains intact
The uptrend in gold is still clearly in play, as highlighted by yesterday’s spike higher upon the release of the FOMC announcement. A subsequent pullback this morning has brought us back towards yesterday’s low of $1115. Given that we have seen such a clear trend in play recently, it seems likely we will see another move higher from here.

As such, a bullish view remains, for a move back towards $1128 and $1132 levels. It is worthwhile noting we are approaching a crucial long-term descending trendline which forms the top of a multi-year falling wedge. Thus this rally could run out of steam in the near future. Nevertheless, a bounce today seems highly likely and the bullish bias remains unless we see reversal signals.  

US crude testing crucial resistance
US crude has been trading within an ascending triangle formation recently, with the $32.95 level largely capping any attempted move to the upside. This is happening once again today, with US crude currently selling off from Tuesday’s $32.70 peak.

However, an ascending triangle is a bullish pattern and thus the break is expected to be to the upside. As such, we will await a closed hourly candle above $32.95 for a bullish signal, which would point towards $34.00 as the next major resistance level.

Until then, there is a chance we could sell back off to the ascending trendline and simple moving average cluster (currently around $31.30-31.44). A closed hourly candle below $32.12 would confirm this bearish move.

Brent leading the way with bullish break
Brent seems to be leading US crude, with the former breaking to a new high yesterday, falling back to previous resistance and finding new support ($33.33). This provides us with a bullish view and points towards a potential break through $32.95 in US crude.

We now have a clear bullish view for Brent, with $35.00 the next major resistance. This view would come into question with a closed hourly candle below $33.33.

Brent crude

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