Gold and Brent crude prices diverge, as coronavirus fears dominate
Gold surges higher as haven demand keeps it on the front foot. Meanwhile, recent upside for Brent crude seems to be over, with the break below $56.21 pointing towards further downside to come.
Gold surges higher as haven demand maintains uptrend
Gold has enjoyed an incredible rise over the past week, with early trade seeing yet another move higher this morning. An initial gap higher is being followed up by further upside as traders attempt to shield themselves from the negative effects of the coronavirus.
Further upside does look likely as the virus continues to spread, with a bullish outlook remaining in play unless we see a break below the most recent area of support around $1659 and $1638. As such, further upside looks likely from here with any short-term weakness seen as a retracement and precursor to further gains.
Brent crude breaking below key support level
Brent gains appear to be over, with the sharp declines seen this morning paving the way for further weakness after breaking below the crucial $56.21 support level. With that in mind, watch for a decline below the overnight lows of $56.07 to signal a likely leg lower from here.
A rally up through $56.74 could bring about a bullish short-term phase, yet such a move would be deemed a wider retracement rather than a continuation of the uptrend seen over the past two weeks.
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