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Technical analysis: key levels for gold and crude

Gold looks set for short-term weakness, yet with North Korea a continued threat, it makes sense to look for longs. Meanwhile, Brent prices drift lower from a crucial resistance level.

Gold bars
Source: Bloomberg

Gold drifting lower from major resistance

Gold managed to break into a near 12-month high yesterday, following yet another nuclear test from North Korea. However, with the price having only fleetingly traded above the major $1337, November 2017 high, the weakness we are currently seeing provides us with a potential short-term period of downside. The $1332 area gives us a clear support level that would lead to a period of weakness. With the price currently moving below that level, there is a good chance we could see further downside from here.

However, it seems risky to short gold of late, given the potential for a North Korea fueled flight to safety at any moment. As such, further short-term downside would be perceived as a buying opportunity rather than something to sell into.

Brent drifts lower from resistance zone

Brent has been drifting lower since hitting the notable $53.00 resistance region last week. The gradual nature of this move indicates that it could be a short-term weakness before we break higher.

However, until that $53.00 mark is broken, there is a chance we could move lower in a similar manner to that seen over the past month. 

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