Technical analysis: key levels for gold and crude

Weakness in commodities today comes off the back of two good days. However, bulls need to keep the momentum going to avoid the risk of a bigger drop. 

Oil rig
Source: Bloomberg

Gold

The price looks ripe for a pullback once more, having tried twice in the past 24 hours to move above $1255. As long as the price holds above $1240 the bulls may be able to push higher once more, with a break above $1255 taking us on towards $1280 for gold.

A drop through $1240 pushes the price towards support at $1230, while below this we return to our old friend, $1200. 

Brent

The price for Brent has fallen back to the 200-day simple moving average ($43.20), but as long as it holds above $42.50 a new bounce may materialise. A break above yesterday’s high at $44.50 would signal a move to the $48.40 area.

Weakness may see the price drop towards $41.50, remaining within the uptrend off the April low. 

WTI

The $42.60 level continues to mark significant resistance to any upward progress, and with bullish momentum having stalled in recent days we may see a bigger drop, first to $39.50 and then on towards $38.

A breakout above $42.50 would target $46.20 over the longer term, with some resistance along the way at $44.80 for WTI.

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