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Technical analysis: key levels for gold and crude

Gold looks set for further gains as it seeks to hit the $1200 mark. Meanwhile, crude has slipped lower this week, with further losses likely. 

Gold smelter
Source: Bloomberg

Gold continues to grind higher

Gold has been slowly moving higher in a relatively consistent manner this week, with price breaking through the $1185 resistance level overnight.

While we are seeing some short-term weakness over recent hours, this is likely to be fleeting, with trendline support coming into play. Unless we break below $1180, another move higher seems likely from here.

Brent drops back below key support level

Brent crude sold off sharply yesterday following on from a break below the key $56.45 level on an intraday basis. With the move below $55.42 yesterday, this brings a more bearish outlook to proceedings.

However, it is worth bearing in mind that we could see a significant retracement higher and fresh shorts do not make sense from here. Given that we remain above the $53 mark, the long-term (weekly chart) inverse head and shoulders remains in place.

Thus it makes sense to either await a rally into the $56.90 region for shorts, or else look for longs around the $54.50 region.

WTI sell-off takes a breather

WTI has also been weakening this week, with price falling below the key $52.60 mark. That means the current gains look like a retracement before we sell-off once more. Thus, look out for shorts in the event of a rally into the $54.10 region.

Like Brent, we are approaching the long-term inverse head and shoulders neckline, which at $51.24, would need to be broken for a more bullish long-term view to come into play.

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