Gold and Brent crude prices regain ground overnight
Gold and Brent crude regain ground overnight, yet will it be enough to lift sentiment after yesterday’s declines?
Gold manages to break higher from recent consolidation
Gold has been tightening within a symmetrical triangle formation over the past 24 hours, with the price rising through trendline and $1724 resistance. That move has been relatively fleeting, yet it does point towards a likely continuation of the wider bullish trend. A persistent move through $1724 would solidify that bullish expectation for the day.
However, it is worthwhile noting that yesterday's declines occurred alongside a bearish move for indices. As such, we find ourselves in a curious situation where gold traders are more confident being bullish when stocks are on the rise. Should gold decline as stocks turn south, a break below the $1709 level would point towards a period of downside for gold.
Brent crude finds support at 61.8% Fibonacci support
Brent declines took us into the 61.8% Fibonacci support level yesterday, with the overnight session bringing some respite to those sharp losses. Unfortunately, we are back on a bearish pathway this morning, with the $29.00 lows back in view.
A break back below yesterday's low would signal a continuation of this current period of weakness, yet it is justified to expect some form of stability above the previous low of $24.75 given that we have seen a significant chunk of global production taken off the market since those lows. As such, the big question is whether we are going to resect these Fibonacci levels at $29.39 and $27.62, or else resume the wider downtrend. Should we hold up at Fibonacci support, it could be a sign that the dynamic is starting to shift somewhat as a gradual reopening of some countries helps lift sentiment. Otherwise, if we break below Fibonacci support, it could point towards further losses in anticipation of a long hard road of oversupply.
This information has been prepared by IG, a trading name of IG Australia Pty Ltd. 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.
Speculate on commodities
Trade commodity futures, as well as 27 commodity markets with no fixed expiries.1
- Wide range of popular and niche metals, energies and softs
- Spreads from 0.3 pts on Spot Gold, 2 pts on Spot Silver and 2.8 pts on Oil
- View continuous charting, backdated for up to five years
Live prices on most popular markets
- Forex
- Shares
- Indices
