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Technical analysis: key levels for gold and crude

Gold is heading into a crucial area of support, with a bounce needed if we are to avert a sharp sell-off. Meanwhile, Brent crude could give us a buying opportunity after yesterday’s break higher.

IG Analyst

Publication date : 2018-05-01T09:31:34+0100

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Gold heading towards critical support zone

Gold has continued its decline, with the failure to break through $1326 leading us to yet another move to the downside. This has brought us within reach of the crucial $1307 support level.

The $1303-$1307 zone represents the lower boundary of a four-month range, where a break below would likely spark a strong move lower for gold. Until this happens, there is a good chance we will see another move higher before long. Look out for the creation of a new higher high to signal the beginning of a bullish phase. That would currently come with a break through the $1320 swing high.

Gold price chart

Gold price chart

Gold price chart

Brent retracing after yesterday’s breakout

Brent attempted to break free from the recent period of consolidation, with the price hitting a new three-year high.

However, this move has proved fleeting, with the price now turning lower. This could provide us with a good opportunity to go long on this market, with Fibonacci retracements coming into play as potential buying levels. Thus, watch for the 61.8% ($73.86) and 76.4% ($73.46) retracements for that purpose. A break below $72.49 would negate this bullish short-term view and bring us back into the consolidation phase.

Brent price chart

Brent price chart

Brent price chart

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