Technical analysis: key levels for gold and crude

Commodities continue to tumble, with gold and crude selling off. However, while gold is approaching a range bottom, crude has only recently broken through crucial support levels and could see selling ramp up.

Gold bars
Source: Bloomberg

Gold looks lower once more

Gold is in the process of turning lower once more, in a continuation of the downtrend we have seen over the past week. There seems to be further in the tank for this move lower as we approach the bottom end of this three-month period of consolidation.

The long-term picture looks bullish, which points towards the potential for longs around the $1307-1310 region. However, for the short-term, further downside seems likely, especially given the break below $1319 this morning. A push back above $1325 would be a worry for the bearish picture, bringing a more neutral view.

Brent falls out of triangle pattern

Brent has finally given way, with price dropping out of a symmetrical triangle formation yesterday. This points towards further losses. Given the shallow retracement we have seen so far, an hourly close below $45.94 would provide confidence that we are not going to see any further upside. A bearish view remains in place unless we see an hourly close above $47.71.

WTI turns lower once more
WTI has also sold off sharply, with price breaking through both a head and shoulders neckline, along with the key $45.16 swing low. Again, given the shallow retracement, a closed hourly candle below $43.90 provides us with a bearish signal that we are likely to see another sharp move lower for WTI. A bearish view remains in place unless we see price break back above $45.76.

IGA, may distribute information/research produced by its respective foreign marketing partners 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.