Technical analysis: key levels for gold and crude

Both gold and Brent have been showing signs of weakness after recent gains. However, while gold looks likely to see further weakness, Brent remains above a key support level, for now.

Gold looks set for further downside

Gold has been selling off heavily this week, with the price losing $31 since the Tuesday high. Given the fact that the last two sell-offs from the $1357-1366 resistance zone brought about a move into the $1310 region, there is a good chance we will see further downside to come.

That being said, we are unlikely to see that move come in a straight line, and thus look out for a potential retracement before we turn lower again. The near-term level to watch is the $1328 peak set earlier this morning, where an hourly close above there would provide a signal that this weakness may be challenged in the near term. Until that happens, further downside is still the likeliest event.

Brent continues to struggle with $70 hurdle

Brent remains stuck below the $70.00 mark, with yesterday’s rise in US inventories failing to help things.

We need to see an hourly close below $68.22 to provide a more bearish short-term view. On the flip-side, we would need the price to rally through the key $70.00-$70.85 resistance zone to provide a bullish continuation signal. 

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