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Technical analysis: key levels for gold and crude

Gold and Brent are both in consolidation mode. However, with gold at the bottom of recent declines and Brent at the top of a recent uptrend, could we see both markets turn around in opposite directions?

IG Analyst

Publication date : 2018-05-24T09:57:25+0100

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Gold continues to grind higher

Gold continues to consolidate, with the price seemingly forming a base from which we could see a projection higher in the near future. The decline of last week has provided us with a fall into both trendline support and the 61.8% retracement.

With trade issues rearing their head over in the US, we are seeing a shift into havens. While this hasn’t impacted gold much, there is a good chance we could build from this base and push higher. This could simply be a retracement, and as such, any sharp move higher would have the Fibonacci retracements to contend with. However, with the wider trend providing higher lows, there is also a good chance we could see a substantial rally very soon. A break below the $1288 mark would negate this bullish short-term view.

Gold price chart

Gold price chart

Gold price chart

Brent sideways within uptrend

Brent has failed to create new highs this week, with the price trading largely sideways in a consolidation phase. That could mean we are due a pullback, but could also simply be a breather before we continue to rise once again.

The bottom Bollinger band has been a reliable indicator from a support perspective, and as such, any further downside should be looking at the Bollinger band and $78.12 for support. A break below $78.12 would signal a more bearish outlook coming into play. Until then, the bullish trend remains in place, where an hourly close above $80.44 provides a heightened chance of an upside continuation.

Brent price chart

Brent price chart

Brent price chart

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