Technical analysis: key levels for gold and crude

Commodities gain across the board, with crude pushing higher despite sharp gains in gold.

Worker inspecting oil barrels
Source: Bloomberg

Gold breaks higher once more
As is typically the case, widespread selling in the equity markets has driven gains in gold, with a break through yesterday’s high of $1253. We are clearly creating continued higher highs and higher lows, which is expected to continue.

However, given the significant rally in play, it makes sense to await another retracement before looking for longs once more. The long-term picture is bullish, with recent months creating a symmetrical triangle following a sharp appreciation.

As such, this short-term bullish trend fits in with the bigger picture and provides confidence that further upside is likely. Resistance levels of note are $1263 and $1270, with support at $1244 and $1238.

Gold price chart

US crude sees minor retracement within uptrend
US crude has been sharply appreciating over recent days, albeit in a relatively choppy manner. This morning has seen it drift lower, yet another leg higher seems likely before long. The bullish indicator for another leg higher would be a closed hourly candle above yesterday’s high of $45.83. Should that occur, we would be looking towards the next major resistance level at $48.77.

Alternately, a closed hourly candle below this morning’s low of $45.18 would look at a deeper retracement lower, with $44.51 the next important support level before $44.00. A closed hourly candle below $44.00 would look to negate this uptrend.

US crude price chart

Brent seeks to break higher once more
Brent has seen a similarly shallow pullback this morning, with the 38.2% providing support this morning. Once more, we are looking for a closed hourly candle above yesterday’s high ($47.21) for a bullish signal.

Should this occur, we would be looking towards the $47.62 and $48.55 as the next resistance levels. Alternately, a move below $46.53 would look for a deeper pullback, with $46.00 a support level to watch. A closed hourly candle below $45.45 would negate this uptrend.

Brent crude price chart

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This information has been prepared by IG, a trading name of IG Markets Limited and IG Markets South Africa 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. International accounts are offered by IG Markets Limited in the UK (FCA Number 195355), a juristic representative of IG Markets South Africa Limited (FSP No 41393). South African residents are required to obtain the necessary tax clearance certificates in line with their foreign investment allowance and may not use credit or debit cards to fund their international account.