Technical analysis: key levels for gold and crude

Gold hesitates as we approach the key FOMC meeting, yet with a clear downtrend intact, it looks like gold bears and oil bulls will soon come back into play.

Oil rig at sea
Source: Bloomberg

Further losses likely for gold

Gold is consolidating around the $1157 mark, following on from a break to a new low back on Monday.

We would need a break above $1181 to negate this recent downtrend and until that occurs, further losses seem likely. 

Brent pullback unlikely to last

Brent crude has been moving lower since the weekend’s output cut announcement. However, with price having broken through a major long-term resistance around $54.30, the current weakness looks likely to be a pullback to previous resistance.

Whether that amounts to a pullback all the way to $54.30, or just to close the gap remains to be seen. In either case, despite the potential for more short-term losses, it seems likely we will break higher once more before long. 

WTI reaches notable support level

WTI is also pulling back following a break through a crucial area of resistance. With that in mind, another leg higher seems likely, with support levels of note occurring at $52.89, $52.25 and $51.24.

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