Technical analysis: key levels for gold and crude

Sharp sell-offs in both crude and gold seek to bring more bearish outlooks. However, gold now looks attractive at the current price, whereas crude awaits a triangle breakout for directional confirmation.

Worker inspecting oil barrels
Source: Bloomberg

Gold back down to major support zone

Gold tumbled below the crucial $1333 and $1330 support levels yesterday, after price fell out of an ascending triangle pattern. However, despite these losses, all is not lost for gold bulls, with price coming into a very interesting area of support.

The overnight lows almost touched trendline support, which also coincided with the 76.4% retracement drawn from the 28 June low of $1305. That low is in the midst of a major cluster of support levels which are unlikely to be broken with this current move lower.

With that in mind, this current area seems relatively cheap, with a move higher likely soon enough. As such, while we could see further short-term weakness given yesterday’s move, it makes more sense to be bullish for a move back towards the upper end of this wider symmetrical triangle.

Brent trading in triangle formation

Brent sold-off sharply yesterday, bringing price back down towards the crucial $48.82 support level. A break below that level would be a significant bearish signal, bringing $48.33 and $47.91 support levels into view.

Alternately, an hourly close above $50.53 would provide a renewed bullish view to continue the recent uptrend. 

Crude bounces from support

WTI is also trading within a triangle formation, with price having bounced from the crucial $46.64 support level yesterday. Once more the bias will be dictated by the breakout above $48.35 or below $46.64, with an hourly close providing the signal. 

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