Technical analysis: key levels for gold and crude

Crude and gold could be set for a reversal of recent trends, with gold finally finding buyers, and WTI starting to form a potential intraday top.

Oil pump
Source: Bloomberg

Gold rebounds from critical support level

Gold has finally found some buyers, with the rapid decline seen over recent weeks bringing the price back into the critical $1236 support level. A break below there would have pointed towards a long-term bearish picture coming into play.

However, with the price having rebounded from that support level, pushing through the first intraday swing high of $1255, there is a good chance we could see a more protracted move higher. With gold turning lower, the big question is whether any downside move would be a retracement followed by a rally through $1260 (bullish), or else a fall below $1236 (bearish).

WTI consolidation could point to near-term pullback

WTI has been consolidating this week, with the price rotating around the $72.88 peak set in late May.

With the intraday picture showing lower highs and lower lows, there is a chance we are forming some sort of top, with a potential retracement phase coming into play. Look for a break below $71.74 as a bearish signal over the short term, where a break above $74.08 would be required to resume the bullish trend.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. 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. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money. Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.