Technical analysis: key levels for gold and crude

Both gold and Brent start to turn a corner, with a potential commodity rally on the cards.

Oil pump
Source: Bloomberg

Gold pulls back following notable rally

Gold has managed to break through the notable resistance level of $1209 on Friday, following a pullback to $1200 last week. This looks to pave the way for a period of strength for gold, yet the key challenge to overcome will be $1219. This morning has seen the market fail at that level, with price currently pulling back.

However, given Friday’s price action, this looks like a temporary retracement before we push higher once more. As such, as long as we do not see an hourly close below $1199, then a bullish outlook remain in place. Support levels of particular importance are $1209 (50% retracement and previous swing high) and $1204 (76.4% retracement).

Could Brent be set for a recovery?

Brent crude failed to break below the critical $53.00 mark last week, despite a clear downtrend into this key area of support. Interestingly, last week’s price action provided us with the creation of a new higher low, pointing towards a potential recovery from this major support zone.

It also means we are now looking at a symmetrical triangle formation, which is certainly more encouraging for Brent bulls. For us to start looking for long positions, we would need to see a four-hourly close above $57.19.  Until then, there is a good chance this triangle pattern will continue to rule Brent price action.

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