Technical analysis: key levels for gold and crude

Both crude and gold continue to consolidate, following recent gains. However, with crude trading around a multi-year resistance zone, we could see directional volatility come back into play soon enough. 

Oil plant
Source: Bloomberg

Gold uptrend remains intact

Gold is rallying after yet another sell-off which failed to break below the key $1260 support level. As such, the gradual recovery we have seen since the early October sell-off remains on track.

An hourly close above $1272 would provide us with a sign that we are breaking higher once more.

Conversely, an hourly close below $1260 would be a warning sign that the selling pressure could be coming back into play.


Brent consolidation continues

Brent has been seeing relatively choppy price action over the past three weeks, with price rotating between $51.23 and $53.94. We are currently in the ascendancy following a sharp deterioration into the lower end of the range. As such, further upside seems likely, with an hourly close above $52.72 providing a clue that we are heading towards the $53-$54 mark.

This consolidation takes place at a major resistance area historically and as such, a bullish breakout from here could provide a significant period of upside.


WTI turning higher following sell-off

WTI is similarly on the rise, with yesterday’s weakness providing us with another deep retracement within the $49.53-$52.22 range. An hourly close above $51.06 would provide a bullish short-term view for a move back into the $52 region. Similarly, we are at a crucial area of resistance historically, with a break above $52.05 providing a 15-month high.

As such, it makes sense to simply play the range until we see a breakout, which could spark a sustained period of directional volatility.


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.