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Technical analysis: key levels for gold and crude

Gold is grinding higher following recent losses, while Brent price continues to consolidate as we wait for the breakout.

IG Analyst

Publication date : 2017-09-20T10:21:14+0100

Oil pump

Source: Bloomberg

Gold gradually regaining ground

Gold has been regaining ground after a drop below the 76.4% retracement. The fact that we saw the price convincingly break below that retracement points towards an increased likeliness of a break lower. However, we need to see a move below $1298 to bring about a bearish outlook to the medium-term picture. For the time being, we are seeing a push into the $1316 resistance level, which represents the most notable near-term level.

However, a break above $1334 would be the ultimate signal to show that this pullback is over. The shallow nature of this current move higher suggests that this could be a short-term retracement before we move lower once more. As such, watch out for a potential weakening from the $1316 mark, where a move back above would point towards a bullish short-term picture at least.

Gold price chart

Gold price chart

Gold price chart

Brent continues to range

The Brent consolidation phase has continued to dominate, with yesterday’s rally being sold into. The price is currently around midway of the $54.70-$55.82 range.

As such, it makes sense to buy near support and sell near resistance until we see an hourly close above one of those levels. That being said, the breakout is expected to come to the upside, given the trend coming into this consolidation.

Oil price chart

Oil price chart

Oil price chart

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