Technical analysis: key levels for gold and crude

Risk aversion keeps gold prices propped up, while Brent continues to push higher in the wake of tropical storm Harvey.

Gold
Source: Bloomberg

Gold pullback unlikely to stem tide of buying

Gold pulled back into the 61.8% retracement yesterday, as fears over North Korea eased somewhat. However, with another test seemingly just around the corner, not many investors are willing to trade against gold at the moment, leading to increased confidence that this uptrend will persist.

With that in mind, coupled with the fact that we have not broken to a new low, it makes sense to look for gold to rally from here. A break below $1326 would negate this bullish outlook.

Brent rallies into trendline resistance

Brent is continuing to push higher today, moving the price closer to trendline resistance. The daily chart below highlights that a move through $54.87 would be needed to break out from the wider downtrend, which has been in play throughout 2017 so far.

However, until that happens, there is a chance we could start to see Brent respect this impending area of resistance. In the short term, the uptrend remains bullish, but watch out for possible signs of a reversal as we run up to this resistance. 

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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.