Technical analysis: key levels for gold and crude

Gold weakness comes into question, with price rising into wedge resistance. Meanwhile, crude strength has started to show signs of weakening.

Oil pipeways
Source: Bloomberg

Gold testing wedge top

Gold is testing a descending trendline this morning, as we start to see some signs that the recent downturn could come under pressure. The continued creation of lower highs and lower lows provides us with a reason to believe that the trend remains in play for now, yet a break and hourly close above $1181 would provide a signal that we are set for some short-term gains.

As such, watch out for whether this trendline breaks and whether $1181 remains intact as a gauge of whether this downtrend will continue apace.

Brent showing initial signs of weakness

Brent crude has been rolling over on an intraday basis, with a fall below the $54.30 mark providing a new low which looks like it will be followed by a lower high.

The key level which needs to be broken to provide confidence of a wider sell-off is $53.00. However for now, a period of continued short-term weakness seems likely following a sustained period of strength for Brent. We would need an hourly close above $55.08 to provide a short-term bullish outlook once more. 

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.