Technical analysis: key levels for gold and crude

Gold is bouncing higher from a massive $1077 support level, while the crude bounce falls short of the levels needed to provide a bullish outlook.

Silver bars
Source: Bloomberg

Gold hits major support

Gold has once more returned to the $1077 support level this morning, following yesterday’s strong move higher in the wake of the Paris attacks.

The $1077 level is absolutely crucial and a close below it could spark off yet another round of selling given that it would be the lowest close in almost six years.

For now, we are seeing a bounce higher and given the strength of this support level, it would seem likely that we will see a continuation of this short-term bounce higher, with notable resistance levels at $1081, $1085 and $1096.

The overall bearish view will only return once we see a close below $1077.

US crude choppy following selloff

US Light crude prices have been very choppy so far this week, with sharp selling preceding an immediate sharp recovery yesterday afternoon. The four-hour chart shows that the downtrend remains in play, with price falling short of the $43.25 mark.

For now, we have not seen any sign that this represents a bullish reversal and would need to see price close above $43.25 to point towards the $45.00 and $45.43 resistance area.

However, with price having broken back below the $42.03, the bearish view remains in play unless price closes above $43.25.

Brent below key resistance

Brent has seen a resistance of $45.23 hold up yesterday, with the crucial level representing the January 2015 low.

The downtrend remains clearly in play and thus downside is expected unless price closes back above $46.00. Unless that happens, selling is preferred, with the $42.50 support a key level to watch.

Alternately, should price close back above $46.00, then resistance at $47.00 would be key.

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