Technical analysis: key levels for gold and crude

Crude tumbles as OPEC output rises. Meanwhile, gold comes under the microscope as it heads towards a critical support level.

Gold bars
Source: Bloomberg

Gold threatens to break down

Gold has continued to sell off throughout the week, with the price falling below the 76.4%. The wider context is of a market which has moved into an absolutely critical area of support, at $1236.

A break below there would pave the way for a substantial breakdown in the price of gold. However, we are either going to see that break occur, or else find some support from these levels. As such, watch for a break below $1236, with a strong chance of a rebound if we cannot see such a downside break.

Brent attempts recovery after yesterday’s decline

Brent reversed lower yesterday, with the recent ascent coming under pressure thanks to an announcement of significantly higher output from Saudi Arabia.

The ability to break below the $72.24 level will be a key determinant of whether we see a breakdown from here or not. Until then, look for this rebound to continue.

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