Technical analysis: key levels for gold and crude

Gold and Brent experience short term gains amid wider downtrends. Yet how long will this last?

Oil rig
Source: Bloomberg

Gold’s pullback could bring further upside

Gold has been trading higher in a consistent manner this week, coming off the back of Friday’s break through the key $1229 resistance level.

Given the bullish short-term view, this current retracement looks like a possible buying opportunity. The preferred area for longs comes at $1234-1235 given the risk-to-reward implications. A break back below $1233 would negate this bullish short-term outlook.

Brent begins to turn higher once more

Early losses appear to be abating for Brent, with the price having failed to break below the notable $48.27 support level. Ultimately, we would need to see a break back below $47.30 to bring about a more bearish picture once again.

However, in the short term, it is worth watching the ability to maintain the price above $48.27 as this could also be used as a swing low, above which the market could turn back into the short-term uptrend. 

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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.