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CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please ensure that you fully understand the risks involved. CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please ensure that you fully understand the risks involved.

Technical analysis: key levels for gold and crude

Gold has paused off the back of a sharp period of weakness, while Brent weakness continues to drive price closer to a key breakdown level.

Gold bars Source: Bloomberg

Gold drifting lower after rebound

Gold managed to rebound sharply yesterday, coming off the back of a week of downside for the precious metal.

Given that the recent sell-off came from the 76.4% Fibonacci retracement, this current rise is expected to be a retracement before we turn back towards the $1266 lows. Whether we will see another short-term leg higher or not remains to be seen. However, a wider bearish move does look likely before long, with a rise through $1303 required to negate this bearish pattern.

Gold price chart Source: ProRealTime
Gold price chart Source: ProRealTime

Brent retraces upwards in the wake of sharp declines

Brent fell sharply yesterday, with the market building on the initial bearish signal of a break below $69.33. However, the most important move came with a drop below $68.72 yesterday.

This points towards a wider bearish picture coming into play for the medium term. For today, it looks like we could see further upside as markets take a breather ahead of the weekend. However, the pathway seems to be set, with a bearish picture likely to return before long.

Brent price chart Source: ProRealTime
Brent price chart Source: ProRealTime

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