Technical analysis: key levels for gold and crude

Commodities gain across the board, with crude pushing higher despite sharp gains in gold.

Worker inspecting oil barrels
Source: Bloomberg

Gold breaks higher once more
As is typically the case, widespread selling in the equity markets has driven gains in gold, with a break through yesterday’s high of $1253. We are clearly creating continued higher highs and higher lows, which is expected to continue.

However, given the significant rally in play, it makes sense to await another retracement before looking for longs once more. The long-term picture is bullish, with recent months creating a symmetrical triangle following a sharp appreciation.

As such, this short-term bullish trend fits in with the bigger picture and provides confidence that further upside is likely. Resistance levels of note are $1263 and $1270, with support at $1244 and $1238.

US crude sees minor retracement within uptrend
US crude has been sharply appreciating over recent days, albeit in a relatively choppy manner. This morning has seen it drift lower, yet another leg higher seems likely before long. The bullish indicator for another leg higher would be a closed hourly candle above yesterday’s high of $45.83. Should that occur, we would be looking towards the next major resistance level at $48.77.

Alternately, a closed hourly candle below this morning’s low of $45.18 would look at a deeper retracement lower, with $44.51 the next important support level before $44.00. A closed hourly candle below $44.00 would look to negate this uptrend.

Brent seeks to break higher once more
Brent has seen a similarly shallow pullback this morning, with the 38.2% providing support this morning. Once more, we are looking for a closed hourly candle above yesterday’s high ($47.21) for a bullish signal.

Should this occur, we would be looking towards the $47.62 and $48.55 as the next resistance levels. Alternately, a move below $46.53 would look for a deeper pullback, with $46.00 a support level to watch. A closed hourly candle below $45.45 would negate this uptrend.

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