Technical analysis: key levels for gold and crude

Both gold and Brent continue their ascent, yet with the wider downtrends intact, the sellers could come back into play soon enough.

Gold figure
Source: Bloomberg

Gold rallies into 61.8% retracement

Gold continued its ascent yesterday, following a pullback into the 61.8% ($1244) level. This brings us into a wider 61.8% ($1261) retracement of the $1296-$1205 sell-off.Given the expectation of further downside, there is a chance we could see the price of gold under pressure around the 61.8% ($1261) or 76.4% ($1274) retracements.

Considering the sharp move higher yesterday, there is a chance we could start to weaken from here anyway. However, it would take a break back below yesterday’s low of $1244 to provide the signal that recent gains are set to be reversed.

Gold chart

Brent pauses within recent uptrend

Brent has been consolidating around the 61.8% retracement ($50.92), following a sharp ascent over the duration of this week so far. The wider trend remains bearish, unless we break through $54.87, and as such, there is a good chance we could see the sellers dominate once more in the near future.

Watch out for signs of a potential bearish reversal lower, with the 61.8% and 76.4% retracements relevant to that possible move. As such, while the short-term trend remains bullish, there is a chance we could see a bearish story build in the coming week.

Brent chart

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