Technical analysis: key levels for gold and crude

Gold is starting to show some initial signs of weakness after recent gains, while Brent is regaining ground in the wake of substantial losses. Will this continue, or will the wider trends come back into play?

Gold consolidating after recent ascent

Gold has been in consolidation mode since Friday, with the price starting to ease back after recent gains. The size of those gains means that we could move into retracement mode soon, yet until we see something from the price action to tell us as much, the uptrend remains intact.

As such, watch out for a break below the $1277 level to bring a more bearish short-term outlook to proceedings.

Gold chart

Gold chart

Brent continues to regain ground

The Brent sell-off has abated for now, with the break through trendline resistance adding some bullish sentiment for the short term.

The fall into $50 did seem somewhat overdone, and thus it makes sense that we see some upside for this market. Thus far we have rallied into the 61.8% level, with the 200 simple moving average (SMA) on the four-hour chart also coming into play. For this rebound to gain credibility, watch for a break through the $63.75 level. Until then, we need to see the 61.8% and 76.4% Fibonacci retracements cleared to provide greater confidence that this is not simply another retracement before we turn lower again.

Brent crude chart

Brent crude chart


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