Technical analysis: key levels for gold and crude

Gold hesitates despite wider bullish overview, while Crude prices continue to rise towards major resistance levels.

Gold
Source: Bloomberg

Gold drifting lower towards trendline support
Early gains from yesterday have eroded heavily for gold, with the market moving towards a crucial ascending trendline. This trendline has propped up the price over the past week and thus there is a good chance we could see any selling capped at this level.

Alongside this, we also have the $1271 support level, which could coincide to provide another bounce. Following the triangle breakout in late April, a bullish outlook came back into play once more and thus we look at this market with the view that the bullish medium-term picture will return eventually.

With that in mind, this current downside seems unlikely to last, with a break towards $1287 likely in the coming days. However, a closed hourly candle below $1263 would negate this bullish view.

Gold daily chart

WTI charges towards massive resistance level
It has been a very consistent start to the week for WTI, with yesterday’s gains continuing into today’s session. It is clear that with such a steady trend, most people will be buying on any short-term pullback.

However, looking at the weekly chart below, it is clear that the $51.24 level is absolutely crucial to price action over the coming days. Should we see a break through this level, then it could mean the worst is over for the market. However, an inability to match or regain that level would be a warning sign that the trend of lower highs and lows remain in play.

As such, any bullish positions should be taken with a knowledge that this $51.24 level is going to be crucial to the market mindset.

WTI daily chart

Brent continues to gain ground amid strong week
The price continues to move higher in a very convincing manner, following on from a substantial rally last week. While this provides a clear trend for people to jump onto, it is worthwhile waiting for a retracement for a better risk/reward ratio.

Any pullback to $48.32 in particular would be an interesting point for bulls to get long once more. The current bullish view would be negated with a break below $47.00.

Brent daily chart

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

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.