Technical analysis: key levels for gold and crude

Both gold and Brent continue their ascent, yet with the wider downtrends intact, the sellers could come back into play soon enough.

Gold figure
Source: Bloomberg

Gold rallies into 61.8% retracement

Gold continued its ascent yesterday, following a pullback into the 61.8% ($1244) level. This brings us into a wider 61.8% ($1261) retracement of the $1296-$1205 sell-off.Given the expectation of further downside, there is a chance we could see the price of gold under pressure around the 61.8% ($1261) or 76.4% ($1274) retracements.

Considering the sharp move higher yesterday, there is a chance we could start to weaken from here anyway. However, it would take a break back below yesterday’s low of $1244 to provide the signal that recent gains are set to be reversed.

Brent pauses within recent uptrend

Brent has been consolidating around the 61.8% retracement ($50.92), following a sharp ascent over the duration of this week so far. The wider trend remains bearish, unless we break through $54.87, and as such, there is a good chance we could see the sellers dominate once more in the near future.

Watch out for signs of a potential bearish reversal lower, with the 61.8% and 76.4% retracements relevant to that possible move. As such, while the short-term trend remains bullish, there is a chance we could see a bearish story build in the coming week.

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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.