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.

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.

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.

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