Technical analysis: key levels for gold and crude

Risk aversion keeps gold prices propped up, while Brent continues to push higher in the wake of tropical storm Harvey.

Source: Bloomberg

Gold pullback unlikely to stem tide of buying

Gold pulled back into the 61.8% retracement yesterday, as fears over North Korea eased somewhat. However, with another test seemingly just around the corner, not many investors are willing to trade against gold at the moment, leading to increased confidence that this uptrend will persist.

With that in mind, coupled with the fact that we have not broken to a new low, it makes sense to look for gold to rally from here. A break below $1326 would negate this bullish outlook.

Brent rallies into trendline resistance

Brent is continuing to push higher today, moving the price closer to trendline resistance. The daily chart below highlights that a move through $54.87 would be needed to break out from the wider downtrend, which has been in play throughout 2017 so far.

However, until that happens, there is a chance we could start to see Brent respect this impending area of resistance. In the short term, the uptrend remains bullish, but watch out for possible signs of a reversal as we run up to this resistance. 

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