Technical analysis: key levels for gold and crude

Risk sentiment drives the commodities space, with gold weakness and crude strength reflecting the risk reversal this morning. However, there are signs that perhaps this is just a temporary reprieve.

Oil refinery pipework
Source: Bloomberg


Gold continues to drift lower following the sharp appreciation on Friday. Clearly this was a safe haven move and as such, it is likely we will see further gains for gold around the corner. The key level of support here is $1307, which appears unlikely to be broken.

As such, a rally seems likely to occur soon, with an hourly close below $1307 required to provide a less bullish view. Key resistance levels are at $1330 and $1336.

Gold price chart


Yesterday saw Brent crude bounce from a crucial support level at $47.26, with price rallying ever since. We can clearly see this does not negate the post-Brexit downtrend and as such, price would need to close above $49.43 to negate the bearish view.

Watch out for the 76.4% retracement ($48.92) as a potential area for the sellers to come in once more.

Brent crude price chart


US crude has also rallied heavily, yet looking at this on the hourly chart, we have seen an interesting convergence of resistance. With price having touched the 76.4% retracement and descending trendline, there is a good chance we will see a move lower for WTI from here.

The stochastics are clearly overbought and as such momentum is on the turn. With that in mind, it makes sense to be bearish with this view only negated should we see an hourly close above $48.10.

WTI price chart

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