Technical analysis: key levels for gold and crude

Crude rallies and gold comes off, yet could we be set to see the opposite occur as the two markets come back on trend?

Gold smelter
Source: Bloomberg


Gold has taken a less convincing shape today, as the fall below $1316 overnight negated the continued creation of higher highs and higher lows.

We look likely to have bottomed out on the real short-term and as such a move higher is expected for the beginning of today’s session. However, we will need to break back above $1327 to show that the rally is back on.


Brent has rallied into yet another 76.4% retracement yesterday following a big US crude inventories drawdown. We remain within a potential topping pattern here, with lower highs being created. This holds unless we see an hourly close above $51.73, which would provide a more bullish outlook.

As such, it is worth looking out for intraday bearish reversal signals for as long as we remain below $51.73. The falling MACD histogram highlights the fact momentum appears to be on the wane, which could lead to another move lower, with $50.00 and $49.27 the next key support levels. 


US crude has also seen a deep retracement, set within what looks like a clear downtrend over the past month. Price is currently only marginally above the 76.4% retracement, which provides a 3/1 risk-to-reward for a move back down to $46.00 rather than through $50.56.

We could be seeing a consolidation before another leg higher, yet we could be seeing a reversal lower. Thus watch out for shorter intraday charts to provide clues of the impending price action.

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.