Technical analysis: key levels for gold and crude

The overnight resurgence in gold and crude seems unlikely to last, as the price begins to sell back into the downtrend once more.

An offshore oil rig
Source: Bloomberg

Gold resurgence looks temporary

The bounce seen in gold yesterday has brought the price back to the 50-period simple moving average (four hour), with it failing to close above trendline resistance. The price of gold has been on a clear downward trend and despite this respite, we have seen no signs that this upside will last. As such, unless the price closes above the $1081 resistance, further downside seems likely, with support of note at $1064 and $1053. Resistance levels to watch are the trendline and SMA convergence, along with $1077 and $1081.

US crude erasing overnight gains

US crude has been somewhat choppy over recent weeks and this week is no exception. While the intraday direction of oil for the time being seems to change on a daily basis, it is clear for now that the $42.00 support level is absolutely key to price action over the past week. Thus should this current selling push the price back to $42.00, another bounce seems likely. Or else a close below the support level could provide the impetus to see US crude move back towards $41.00 and $40.00 levels.

Brent resurgence short-lived

The overnight gains in Brent are also being unwound, with 50-hour SMA resistance leading to a sharp selloff in the current hourly candle. This coincides with $45.31 resistance, from both Wednesday and Thursday’s support. Given the downtrend in play over the past week, another leg lower seems likely, with support levels of $44.78 and $44.45 near-term levels to watch. 

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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.