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Technical analysis: key levels for gold and crude

Gold looks set for further gains as it seeks to hit the $1200 mark. Meanwhile, crude has slipped lower this week, with further losses likely.

IG Analyst

Publication date : 2017-01-10T10:17:24+0000

Gold smelter

Source: Bloomberg

Gold continues to grind higher

Gold has been slowly moving higher in a relatively consistent manner this week, with price breaking through the $1185 resistance level overnight.

While we are seeing some short-term weakness over recent hours, this is likely to be fleeting, with trendline support coming into play. Unless we break below $1180, another move higher seems likely from here.

Gold price chart

Gold price chart

Gold price chart

Brent drops back below key support level

Brent crude sold off sharply yesterday following on from a break below the key $56.45 level on an intraday basis. With the move below $55.42 yesterday, this brings a more bearish outlook to proceedings.

However, it is worth bearing in mind that we could see a significant retracement higher and fresh shorts do not make sense from here. Given that we remain above the $53 mark, the long-term (weekly chart) inverse head and shoulders remains in place.

Thus it makes sense to either await a rally into the $56.90 region for shorts, or else look for longs around the $54.50 region.

Brent crude price chart

Brent crude price chart

Brent crude price chart

WTI sell-off takes a breather

WTI has also been weakening this week, with price falling below the key $52.60 mark. That means the current gains look like a retracement before we sell-off once more. Thus, look out for shorts in the event of a rally into the $54.10 region.

Like Brent, we are approaching the long-term inverse head and shoulders neckline, which at $51.24, would need to be broken for a more bullish long-term view to come into play.

WTI crude price chart

WTI crude price chart

WTI crude price chart

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