Technical analysis: key levels for gold and crude

Oil prices are at risk of further falls, while gold has revived as opportunity appetite takes a knock.

Gold bars
Source: Bloomberg

Gold flirting with the 200-day SMA

A recovery off the $1240 level has taken gold price back towards the key $1260 zone, and once again the price is testing the 200-day simple moving average (SMA) at $1258.

A breakout above here, combined with the recovery back above the declining trendline, would suggest that the next target on the upside is the November peak at $1308, with some resistance at $1271 and $1281. Sellers would need to break below the $1240 level and create a new lower low to put more weight behind a bearish outlook.

Brent falling down again

Brent has been shedding ground over the past two days, having fallen back from the $53.94 resistance area. Now we look to see if it can maintain its bearish move, with a push into the $50-$51.50 support zone that held in March.

A break below $51.30 would be the first step, and could open the way to $50, with a move below here signaling more weakness. A rally has to break $54, and would put the commodity back in the consolidation zone that prevailed from December until March. 

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.

Find articles by analysts

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.