Technical analysis: key levels for gold and crude

Gold is grinding higher following recent losses, while Brent price continues to consolidate as we wait for the breakout.

Oil pump
Source: Bloomberg

Gold gradually regaining ground

Gold has been regaining ground after a drop below the 76.4% retracement. The fact that we saw the price convincingly break below that retracement points towards an increased likeliness of a break lower. However, we need to see a move below $1298 to bring about a bearish outlook to the medium-term picture. For the time being, we are seeing a push into the $1316 resistance level, which represents the most notable near-term level.

However, a break above $1334 would be the ultimate signal to show that this pullback is over. The shallow nature of this current move higher suggests that this could be a short-term retracement before we move lower once more. As such, watch out for a potential weakening from the $1316 mark, where a move back above would point towards a bullish short-term picture at least. 

Brent continues to range

The Brent consolidation phase has continued to dominate, with yesterday’s rally being sold into. The price is currently around midway of the $54.70-$55.82 range.

As such, it makes sense to buy near support and sell near resistance until we see an hourly close above one of those levels. That being said, the breakout is expected to come to the upside, given the trend coming into this consolidation. 

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