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Technical analysis: key levels for gold and crude

Gold is clinging on to $1225, while Brent crude looks set for more gains after it bounced off a key trendline last week.

Gold bars
Source: Bloomberg

Gold keeps holding on

Yesterday’s bounce fizzled out, with gold unable to push above the $1235 level that has become resistance over the past three sessions.

The $1225 level continues to hold, so if this base remains in place there is still a possibility of a rally, although it needs to clear $1235 and then get back to $1250 to suggest a move higher is underway. A drop below $1225 would likely lead to a swift unravelling of bullish positions, and a push down to $1195, the March lows.

Gold price chart

Brent getting ready for further gains

The rising trendline off the July lows came to the rescue of Brent on Friday, with the price bouncing and being given further support thanks to some OPEC jawboning.

With buyers now moving back in, we look for a push above $50, which would see a break of the most recent lower high on the hourly chart. Beyond this we look to $52 and then $52.50.

Brent price chart

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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.