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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