Technical analysis: key levels for gold and crude

Gold back in favour as it continues to push higher. However, with the dollar coming back to strength, we are seeing crude continue to tumble.

Gold bullion
Source: Bloomberg

Gold seeks to break higher once more
Gold saw yet another push higher yesterday, with the price reaching both trendline resistance and the notable $1271 resistance level. However, despite the subsequent retracement, it looks like we are set to see another move higher to challenge that level once more.

An hourly close above $1271 should see another leg higher for gold, with the bullish view only negated with a closed hourly candle below $1256.

Brent failure swing points to further losses
Brent has seen a failed attempt to break higher followed by a move through key support, thus forming lower highs and lower lows. We have seen such a strong rally of late that this could just be a retracement of the June rally.

Nevertheless, the hourly close below $51.68 points towards a short-term bearish outlook, with $50.89 the next support level of note. We would need to see an hourly close above $52.30 to negate this view.

US crude breaks key support level
WTI has similarly broken through a crucial support level, at $50.62, to complete a lower high and lower low pattern. This points towards a situation where people will likely look to sell into rallies.

With that in mind, the short-term view is bearish until we negate this trend. As such a bearish view is held unless we see an hourly close above $51.14.

This information has been prepared by IG, a trading name of IG Markets Limited. 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. See full non-independent research disclaimer and quarterly summary.