CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please ensure that you fully understand the risks involved. CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please ensure that you fully understand the risks involved.

Technical analysis: key levels for gold and crude

Commodities are on the rise, with gold and crude both gaining ground recently, but how long will it last?

IG Analyst

Publication date : 2017-01-05T10:10:31+0000

Oil pump

Source: Bloomberg

Gold continues to charge towards $1200

Gold has been moving higher in a very convincing manner this week, with price breaking through the key $1165 resistance level yesterday, bringing the $1181 and $1200 targets into play. The current candle is bringing a pullback for the short-term, which could give us a good new entry for longs. As long as we do not break back below $1161, then a bullish outlook is in place.

Longs around the 61.8% and 76.4% level are interesting, but as ever it is the latter which is of most significance. Given this coincides with the key $1165 breakout level, a pullback to this level would look like a great opportunity. Whether that pullback comes or not remains to be seen and in either case a bullish view is in play unless we move back below $1161.

Gold price chart

Gold price chart

Gold price chart

Brent regaining ground from Fibonacci support

Brent crude has been gaining ground since falling into the 76.4% ($55.55) support level earlier in the week. Certainly it is somewhat of a slow ascent compared with the sell-off that took us here.

However, the current consolidation shows a careful and considered rise for Brent. With that in mind, another leg higher seems likely to be around the corner, with a break back below $54.65 required to negate the wider bullish view.

Brent crude price chart

Brent crude price chart

Brent crude price chart

WTI clawing back ground following sell-off

WTI also fell into the 76.4% retracement, with price gradually recovering since. This morning has seen price consolidation and the next leg from here is expected to be towards the upside.

With that in mind, a bullish outlook remains in play unless we break back below $52.16. Given the wider long-term inverse head and shoulders pattern, this short-term view is paired up with a longer term outlook.

WTI crude price chart

WTI crude price chart

WTI crude price chart

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 IG 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.

Find articles by writer

Disclaimer:

All forms of investments carry risks and trading CFDs may not be suitable for everyone. CFDs are leveraged instruments and can result in losses that exceed deposits, so please ensure that you fully understand, and are aware of, the risks and costs involved. Refer to the Risk Disclosure Statement and Risk Fact Sheet.

IG Asia Pte Ltd (Co.Reg.No. 200510021K) is regulated by the Monetary Authority of Singapore and holds a capital markets services licence for dealing in capital markets products that are over-the-counter derivatives contracts and is an exempt financial adviser.

IG provides an execution-only service. The information in this advertisement does not contain (and should not be construed as containing) investment advice or an investment recommendation, or an offer of or solicitation for a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. You should consider 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.

The information on this site is not directed at residents of the United States or Belgium and is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

This advertisement has not been reviewed by the Monetary Authority of Singapore.