Technical analysis: key levels for gold and crude

WTI is regaining ground as Iranian sanctions help restrict supply. Meanwhile, gold is in consolidation mode, with the wider decline pointing towards further downside to come.

Gold consolidation likely to resolve lower

Gold is in consolidation mode following the decline at the end of last week. This bearish trend continues to remain in place, with lower highs remaining unless we see a break above the $1220 mark.

Even if that was to occur, it is likely that we would be looking at a retracement of the wider sell-off from $1236. As such, a bearish outlook remains in place as long as we trade below $1236, with price action below $1220 pointing towards a near-term fall for gold.

WTI attempts to continue rebound

WTI has been regaining ground since Thursday’s low of $66.42, with that failure to create a new low pointing towards a potential recovery.

The Iran sanctions and talk of closing the Strait of Hormuz has certainly helped things along. However, watch for the potential respect of the 76.4% retracement level as a gauge of whether markets see this as a retracement (bearish) or recovery (bullish).

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