Technical analysis: key levels for gold and crude

Gold and Brent are both in consolidation mode, with gold expected to break lower once more, and Brent expected to turn higher. 

Gold fails to break key upside resistance

Gold managed to temporarily break above trendline resistance, but with the inability to push above the $1307 mark, there is still a strong chance of near-term downside to build on the weakness seen over the past month.

Once more, a break above that $1307 mark would signal the potential for near-term upside, even if it was a retracement of the $1326-$1282 decline. However, until that happens, there is a strong chance of further downside to come for gold, with an hourly close below $1296 required to provide a bearish short-term outlook.

Brent continues to consolidate after recent pullback

Brent has been consolidating this week, following on from last week’s deep retracement in the wake of news that Saudi Arabia and Russia will make up for any loss in output from Venezuela and Iran.

However, that is different from announcing that they are going to abandon the wider cap on output in the Organisation of the Petroleum Exporting Countries (OPEC). As such, this pullback looks likely to provide a buying opportunity, as long as the price does not fall below $72.35. Until then, a bullish rebound looks likely before long. 

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