Technical analysis: key levels for gold and crude

Gold is in consolidation following recent gains, while Brent regains ground after comments from Russia and Saudi Arabia.

Source: Bloomberg

Gold consolidates

Gold is trading sideways at the beginning of the week, coming off the back of a sharp rally. The recent gains have been relatively consistent, with the current consolidation looking similar to that seen in the middle of last week. With trendline support coming into play in the short term, there is a good chance we could see a move higher from here.

An hourly close below $1252 would signal a potential move into the $1245 region. Bear in mind that the wider picture looks to provide a more bearish outlook and thus that trend is expected to kick in once more. However, for now it still looks like any pullback would be a retracement before we push higher once more. 

Gold price chart

Brent regains ground, yet gains could be fleeting

Brent has been regaining ground in the wake of threats from Russia and Saudi Arabia over nations who wish to go back on their pledge to limit output. That being said we are trading within a bearish rising wedge pattern which points towards a potential downside exit.

For now we are regaining ground, yet it is worth watching out for Fibonacci resistance as a potential point for the bears to come back in. The break below $48.39 provides a shift away from the creation of higher lows, and as such a bearish phase may be upon us. Even if we were going to remain within this wedge, a potential ABC retracement would point towards another leg lower.

Brent price chart

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.