Technical analysis: key levels for gold and crude

Gold looks likely to continue its ascent despite a break below trendline support, while Brent seems likely to see further downside.

Gold rings
Source: Bloomberg

Does gold wedge point towards a slowdown?

Gold has been in the ascent over recent weeks, with the price only pulling back from the $1270 mark this week. We have subsequently seen the price break below trendline support.

Given that the uptrend remains in play in terms of higher highs and higher lows, this temporary move below trendline support is not something which seems too ominous. With that in mind, there is a good chance that this current move lower is short-term, with a break below $1248 required to negate this view. In the shorter term, watch out for $1253 support, which, if broken, could point towards further weakness.

Brent looks to be heading for further losses

Brent sold off sharply on Thursday, with the price briefly breaking below the critical $51.18 support level. Despite the subsequent bounce, there is a good chance we could see further downside coming into play.

Watch out for an hourly close below $51.01 as a signal that further downside is upon us. Conversely, an hourly close above $53.00 would provide a bullish outlook.

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.

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