Technical analysis: key levels for gold and crude

Gold has continued its descent, with key support level coming into view. Meanwhile, Brent consolidation remains in play, as we look for a likely break higher.

Gold
Source: Bloomberg

Gold consolidates after yesterday’s sell-off

Gold continued to move lower yesterday, following the risk-on sentiment that has been hurting this market over the past week. Crucially, we have not broken below $1298 to negate the uptrend of recent months.

However, with the price having dropped convincingly below the 76.4% retracement, there is a good chance we could see a break back below $1298 to bring a more bearish outlook. Conversely, a break above $1334 would point towards gold resuming its uptrend.

Brent consolidation likely to bring further upside

Brent has been in consolidation mode over the past five trading days, with the market pulling back into the key $54.87 support level following last week’s breakout. Given the trend coming into this merging period, we are expecting to see a push higher as the eventual breakout.

However, until that occurs, watch out for whether the key $55.82 level is going to hold as resistance once more. The reaction to that level will be crucial in determining whether we will remain in consolidation mode or not.

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