Commodities report: gold and crude

Risk-off sentiment comes back into play, with weak crude prices sparking a resurgence in gold.

Gold
Source: Bloomberg

Gold on the turn?
There's been a strong overnight bounce for gold, following on from Friday’s failed attempt to break below the March low of $1208. There is a good chance that we could start to see gold come back to strength this week, yet the key indicator would be a closed hourly candle above $1244.

For the time being, trendline resistance around $1231 is going to be the chief challenge to overcome if this bounce is to sustain.

Gold daily chart

WTI selling-off from trendline resistance
The commodity has sold-off sharply overnight and despite a brief rally, a key trendline has come into play to push this market lower once more. The potential for a bounce from this 6-month old trendline was providing bulls with hope of another move higher.

However, with this break and subsequent retest as resistance, a bearish view is clearly in play. A strong bearish indicator would be a closed hourly candle below the day’s low of $35.94, which would then look towards $35.38 and $35.20 as the next key support zone. We would need to see an hourly close above $36.30 to negate this bearish view for the short-term.

WTI daily chart

Weakness in play for Brent
​Brent is also weakening heavily this morning, following on from the moves we have seen over the past week. The key here is a closed hourly candle below the $37.41 low, which would point towards another strong move lower, with $37.24, and $36.74 the next key support levels.

Also be aware of the descending trendline support (currently $37.00) which will be in the minds of many traders. Given the long-term downtrend we have for this market, it is clear that this sell-off could have further to run, especially considering the significant gains seen since the January low of $27.43.

Brent daily chart

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