Commodities report: gold and crude

With crude crashing through crucial support levels, further gains seem likely for gold.

Gold
Source: Bloomberg

Gold breaks higher from triangle
Gold has broken out the top of the triangle formation, yet stalled at the $1232 resistance level. Ultimately, we will need a move back through $1240 to point towards a continuation of this wider uptrend, and until then we are confined to shorter term moves. 

With price having returned to trendline support, there is a chance we could see a bounce towards $1232 and $1240. However, we would need to see an hourly close above $1230 to signal the end of the drift lower we have seen over the past 24 hours.

The long term charts signal a bullish bias and thus another move to the upside seems likely soon, yet it is sensible to await a signal of this move first. Resistance levels of note are $1230, $1232 and $1240. Support levels to watch are $1222, $1217 and $1205.

Gold chart

WTI breaking below crucial support level
WTI is breaking through an absolutely crucial support level at $31.22, which is very bearish given the inability to create a new high on Monday. We await a closed hourly candle below this level for confirmation of a double top, which could clearly signal the beginning of another sell-off for oil. Support levels of note are $30.48, $29.70 and $28.95, with resistance at $32.25, $32.86 and $33.38.

WTI chart

Brent tumbles into support
Brent is dropping sharply into the crucial $33.14 support level, which we would need to see broken to confirm the move we are seeing in WTI. A closed candle below $33.14 would provide us with a bearish view, with support levels of $32.23 and $31.20 in view. Resistance levels are at $34.16 and $34.84.

Brent chart

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

This information/research prepared by IGA or IGA Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. 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. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

See important Research Disclaimer.