Technical analysis: key levels for gold and crude

Gold’s decline has halted for now, while Brent shows signs of a bearish phase ahead.

Oil pump
Source: Bloomberg

Gold consolidates after recent decline

Gold has the potential of another breakdown, with the price falling below some notable support levels. There is a possibility we could see another rebound in the short term, due to the price moving largely sideways. 

However, as long as we do not break through the $1289 level, any short-term upside is likely to be fleeting, with a move back below the $1270 mark pointing towards a possible fall into the next $1263-$1265 support zone.

Gold chart

Brent moves back into key support level

Brent has sold off sharply since the Organisation of the Petroleum Exporting Counntries (OPEC) announcement last week, with the price moving into the $62.15 support level.

A break below that level would point towards a possible move back into $61.04. Crucially, with the price failing to break above $64.57, there is a chance that we are seeing the beginning of the end for this crude rally, with a move back below $61.04 forming a bearish double top pattern.

Brent 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.