Technical analysis: key levels for gold and crude

Commodities continue to tumble, with gold and crude selling off. However, while gold is approaching a range bottom, crude has only recently broken through crucial support levels and could see selling ramp up.

Gold bars
Source: Bloomberg

Gold looks lower once more

Gold is in the process of turning lower once more, in a continuation of the downtrend we have seen over the past week. There seems to be further in the tank for this move lower as we approach the bottom end of this three-month period of consolidation.

The long-term picture looks bullish, which points towards the potential for longs around the $1307-1310 region. However, for the short-term, further downside seems likely, especially given the break below $1319 this morning. A push back above $1325 would be a worry for the bearish picture, bringing a more neutral view.

Gold chart

Brent falls out of triangle pattern

Brent has finally given way, with price dropping out of a symmetrical triangle formation yesterday. This points towards further losses. Given the shallow retracement we have seen so far, an hourly close below $45.94 would provide confidence that we are not going to see any further upside. A bearish view remains in place unless we see an hourly close above $47.71.

Brent chart

WTI turns lower once more
WTI has also sold off sharply, with price breaking through both a head and shoulders neckline, along with the key $45.16 swing low. Again, given the shallow retracement, a closed hourly candle below $43.90 provides us with a bearish signal that we are likely to see another sharp move lower for WTI. A bearish view remains in place unless we see price break back above $45.76.

WTI 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.