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Technical analysis: key levels for gold and crude

Both oil and gold are continuing their declines, with a Saudi output cut doing little to raise optimism for oil prices.

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Gold turns lower again as it heads towards support zone

Gold has been selling off sharply over the past week, falling back from the 76.4% retracement level. With the price having dropped below the wider 61.8% retracement, there is a strong chance we will continue to head lower over the short term.

Watch out for the area between the ascending trendline and 76.4% as the next support zone. Should we break below that, it would provide greater confidence that we are going to see a wider downturn for the price of gold.

Gold chart

Brent continues to trend lower

Brent reversed lower once again overnight, despite the rally seen after Saudi Arabia announced plans for a 500,000 barrels per day (BPD) production cut in December.

However, this market is firmly stuck in a downtrend, and further losses seem likely. A rally through the $73.55-$74.11 zone would be required to bring about a more bullish outlook. Until then, watch for continued downside from here.

Brent chart

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