Technical analysis: key levels for gold and crude

Gold and Brent are both in consolidation mode, with gold expected to break lower once more, and Brent expected to turn higher. 

Gold fails to break key upside resistance

Gold managed to temporarily break above trendline resistance, but with the inability to push above the $1307 mark, there is still a strong chance of near-term downside to build on the weakness seen over the past month.

Once more, a break above that $1307 mark would signal the potential for near-term upside, even if it was a retracement of the $1326-$1282 decline. However, until that happens, there is a strong chance of further downside to come for gold, with an hourly close below $1296 required to provide a bearish short-term outlook.

Brent continues to consolidate after recent pullback

Brent has been consolidating this week, following on from last week’s deep retracement in the wake of news that Saudi Arabia and Russia will make up for any loss in output from Venezuela and Iran.

However, that is different from announcing that they are going to abandon the wider cap on output in the Organisation of the Petroleum Exporting Countries (OPEC). As such, this pullback looks likely to provide a buying opportunity, as long as the price does not fall below $72.35. Until then, a bullish rebound looks likely before long. 

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