Technical analysis: key levels for gold and crude

After leaping higher, gold looks at risk of some selling, while oil prices remain robust overall. 

Oil barrels
Source: Bloomberg

Gold

Having moved higher by leaps and bounds, the question is now whether gold is about to close above $1350, or whether the combination of overbought intraday charts and extremely bullish positioning will lead to a swift reversal.

The metal is in an uptrend, so the approach here would be to buy the dips as and when they appear. It is important to note that the steepness of the move since the beginning of June means that we could see a drop back to just below $1280 and still be in an uptrend. A close above $1350 targets the March 2015 highs around $1385.

Brent

Gains since 20 June have been stymied by the $51 level, so although we are still in an uptrend from the Brexit day lows, the metal needs to clear $51 to suggest that more gains are on the way.

The next target above here is $52.85, and then on to the October 2015 peak around $54.15 for Brent.

WTI

There has been a worrying development on the WTI chart, with a series of lower highs since early June. The price needs to close above $50 and quickly, lest further weakening momentum hands the initiative to the sellers.

A close above $50 targets $51.60, while further downward momentum below the 50-day simple moving average ($47.85) would head towards $46.35, which marked support in June and also resistance at the end of April and in early May. 

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