CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please ensure that you fully understand the risks involved. CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please ensure that you fully understand the risks involved.

Technical analysis: key levels for gold and crude

Gold has tumbled lower this week, with the price moving within close proximity of a critical support level. Meanwhile, the Brent bounce continues apace.

IG Analyst

Publication date : 2017-07-04T10:13:36+0100

Gold mining

Source: Bloomberg

Golds breaks trendline, yet key support remains

Gold has seen a sharp move lower this week, following a break below both the 76.4% retracement and trendline support. This brings about a significant risk that second half could be a bit of a shocker for gold prices.

For a wider bearish outlook to come into play, we would need to see a break below the critical $1214 level. That would form the first weekly lower low of 2017. For now, we have seen a little rebound, yet the downtrend remains intact. Considering the proximity to that crucial $1214 support level, it could be prudent to await a break below for further shorts to be considered. Until then, we could see some further gains as the market takes a breather.

Gold price chart

Gold price chart

Gold price chart

Brent weakness would provide buying opportunity

Brent has continued to gain ground in a very consistent manner this week, where any pullbacks have been largely short-term in nature and conform well to the ascending channel.

We are seeing some consolidation at present, which is likely to resolve in another move higher. On this occasion, it seems unlikely that we will see a deep pullback, and, as such, any move back into trendline support, between the 50% and 61.8% ($49.01-49.15) would look like a good buying opportunity. A break below $48.56 would negate this view.

Brent price chart

Brent price chart

Brent price chart

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