Technical analysis: key levels for gold and crude

WTI is regaining ground as Iranian sanctions help restrict supply. Meanwhile, gold is in consolidation mode, with the wider decline pointing towards further downside to come.

Gold consolidation likely to resolve lower

Gold is in consolidation mode following the decline at the end of last week. This bearish trend continues to remain in place, with lower highs remaining unless we see a break above the $1220 mark.

Even if that was to occur, it is likely that we would be looking at a retracement of the wider sell-off from $1236. As such, a bearish outlook remains in place as long as we trade below $1236, with price action below $1220 pointing towards a near-term fall for gold.

WTI attempts to continue rebound

WTI has been regaining ground since Thursday’s low of $66.42, with that failure to create a new low pointing towards a potential recovery.

The Iran sanctions and talk of closing the Strait of Hormuz has certainly helped things along. However, watch for the potential respect of the 76.4% retracement level as a gauge of whether markets see this as a retracement (bearish) or recovery (bullish).

The information 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 Bank S.A. 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 and as such is considered to be a marketing communication.