Technical analysis: key levels for gold and crude

Gold and Brent continue to show signs of a short-term bearish reversal, following recent gains.

Gold bars
Source: Bloomberg

Gold drops out of uptrend

Gold has broken below key support levels this week, with both the first trendline, and then horizontal support being taken out. We are starting to see some strength coming back into play from here, with the $1326 support level key to further gains. As a result, a short-term move higher from here would not be surprising

However, unless we see North Korea announce another test, it looks like any rally would likely be short-term in nature - pointing towards further downside. As long as the price remains below $1358, further downside looks likely. 

Gold chart

Brent continues its descent from key resistance

Brent looks set for further downside, following a rally into the 76.4% retracement overnight. We are seeing the market turn lower once more from here. This points towards a likely continuation of the weakness we have seen since rallying into a crucial resistance zone, between trendline and $54.87 resistance.

A break above the $54.04 level would negate this current bearish short-term outlook.

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.