Technical analysis: key levels for gold and crude

Gold threatens recent gains with potential double top, while Brent rallies into a crucial resistance level that will pave the way for price action from here.

Oil pipes
Source: Bloomberg

Potential double top in gold

Gold has been consolidating over the past 48 hours, with the price moving back in towards $1236 this morning. A break below that level would complete a short-term double top formation.

With that in mind, this chart needs to start moving higher from here, or else things could become more bearish over the short term. An hourly close below $1236 would point towards a possible move into the projected target of $1227.

Brent trading under crucial resistance level

Brent rallied into the crucial $49.92 resistance level yesterday, bringing about the possibility of a more protracted period of strength. A break through $49.92 would complete the creation of higher highs alongside the recent higher low.

As such, given the importance of this level, watch out for the response to it as a gauge of where we will go from here. An hourly close above $49.92 should pave the way for a more protracted period of strength, whereas an inability to break higher could lead to some sort of pullback in the short term.

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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.