Technical analysis: key levels for gold and crude

Falling gold prices are an indication of growing risk appetite, but a retreat for oil is perhaps the fly in the ointment at present. 

Oil rig at sea
Source: Bloomberg


A drop back below the highs of last week for gold suggests a weaker close today might hand the advantage back to the bears. If this continues then we could see a return to support around $1305, the previous major resistance level.

The next resistance to any push higher lies around $1390 and then $1435. 

Gold price chart


Further weakness in Brent prices sits at odds with strength in equities, with an open below support at $46.50 suggesting more downside is on the way.

The next areas to watch will be $45 and then the 10 May low at $43.34. A bounce would need to clear resistance at $46.50 and then move on above $46.20. 

Brent crude price chart


WTI continues to push lower as well, and as a result we may see a further drop to $42.60, last seen in early May. It would need a close above $46 to reverse the negative outlook, and a further drop below the May low would suggest a bigger sell-off.

However, with daily stochastics oversold a bounce may be in the offing, particularly if the dollar continues to weaken. 

WTI price 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.