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Technical analysis: key levels for gold and crude

Crude tumbles as producers fail to reach an agreement in Doha over the weekend. However, gold gains have been quickly eroded, providing a weaker-than-expected outlook.

CFDs are a leveraged product and can result in losses that exceed deposits. Trading CFDs may not be suitable for everyone, so please ensure you fully understand the risks and take care to manage your exposure.
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Source: Bloomberg

Gold tumbles despite initial gains
Gold saw a strong gap higher at the open, given the perceived rush to safety. However, this has come to an abrupt end, with a sharp move lower upon hitting the 76.4% Fibonacci retracement.

Given the downtrend in place over the past week, we would need to see a break through $1244 to say this selloff is over. As such, despite the expectation of gains in line with safe haven demand, gold continues to look weak, driven by the negative trade seen this morning.  

US crude rally unlikely to last
US crude is attempting to regain ground following a circa 8% drop at the open today, following on from Sunday’s impasse in Doha. This certainly puts a more bearish slant on proceedings and thus this current rally is expected to represent a short-term bounce before further losses.

Watch the Fibonacci retracements for potential near-term resistance, with $40 and $40.35 the next in view. Below this, support levels are at $38.91, $37.86 and $36.30.

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CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.