US-Mexico tariffs see gold spike higher, while Brent tumbles
Gold and Brent head in opposite directions on the news that the US is placing tariffs on Mexican imports. This has sent gold sharply lower, while Brent has tumbled into a new two-month low.
Gold spikes higher after Trump hits Mexico with fresh sanctions
The price of gold shot higher yesterday, with overnight gains bringing the pair into a notable area of resistance. The wider downtrend has been underpinned by continued lower highs, and that is what we are watching for in this recent rally.
With the price currently trading at a confluence of resistance that encompasses the 76.4% retracement and descending trendline, there is a good chance we will see the sellers come back into play before long. A break through the $1303 level would be hugely significant, bringing about a break of that wider trend to raise the possibility of a bullish phase. Until then, a move lower looks likely before long.
Brent crude takes another sharp leg lower
Brent saw another huge leg lower yesterday, as the bearish outlook continues to bear fruit. The price is closing in on the notable $64 support level, which raises the chance of a rebound to close out the week.
The bearish outlook remains relevant, yet we are likely to see a rebound before long and thus further sell positions do not seem warranted at this level. Instead, further trades should be built around a retracement or continuation pattern.
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