Gold and Brent crude oil price gains could be fleeting
Gold and Brent regain ground, yet the outlook remains uncertain given coronavirus volatility.
Gold rallies towards resistance
Gold has been experiencing a somewhat mixed time of late, with ongoing virus fears counteracted by a wider desire to be long equities. Nevertheless, the risk-off move seen overnight has helped drive gold towards the $1577 level, where a break through there would provide a continuation of the recent recovery.
The $1577-$1580 resistance zone is going to be important going forward, with a failure to break through providing a more bearish outlook. However, we are in a period of significant uncertainty, and ultimately, we need to see a break through either $1590 or $1547 to signal a potential breakout from this consolidation phase.
Brent crude starts to weaken from key resistance level
Brent has managed to gain a significant amount of ground over the course of the week, with the price moving back towards the crucial $56.60 level. A break through there would point towards further upside coming into play.
However, we are starting to see some weakness emerge, with the stochastic also providing a clue that momentum is shifting to the downside. Thus, we are likely to see some weakness today, with the downtrend remaining intact unless we see a break through that $56.60 resistance level. Until then, further downside remains the default scenario.
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