Gold upside looking likely, while Brent bears are expected to return

Gold and Brent drift lower, yet divergence looks likely amid a bullish gold outlook and bearish Brent picture.

Gold weakness likely to provide buying opportunity

Gold managed to surge up through the $1425 swing high yesterday, with the prospect of a looser European Central Bank (ECB) and US Federal Reserve (Fed) driving greater gold demand.

The wider bullish picture remains in play following a rise through a huge amount of resistance in June. The break through $1425 points towards an eventual rise through $1439, so it makes sense to see this pullback as a buying opportunity rather than the beginning of a bearish phase. Thus, a bullish outlook remains in play unless the price falls below $1382 support.

Brent crude expected to fall further after trendline break

Crude prices failed to react positively to the OPEC extension earlier in the week, with the break below trendline and $64.01 support pointing towards further downside to come for Brent.

The subsequent rebound has taken the price back into that key $64.01 breakdown level, with the sellers coming back into play. Given that initial breakdown on Tuesday, further losses look very likely for Brent.

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