Gold and Brent diverge as crude prices head into key support
Gold and Brent diverge, with gold showing signs of a bullish breakout, while Brent heads towards a key support level.
Gold rallies into resistance, signalling potential bullish breakout
Gold pushed higher once more yesterday, after a failed attempt to break below the $1401 support level. The creation of a tentative new high points towards a possible bullish breakout coming into play, following a period of consolidation.
Given the wider bullish trend coming into this phase, an upside breakout always seemed likely. With this rally providing a change from the recent trend of lower high, watch for a bullish pattern to emerge. This bullish view would be confirmed with a break through $1439.
Brent declines after smaller-than-expected inventories drawdown
Brent has continued its recent downtrend, with yesterday’s smaller-than-expected drawdown in US stocks failing to lift prices. This takes prices below both the 200-day simple moving average (SMA) and 76.4% retracement.
A break below the $62.04 support level would bring about a wider bearish picture, and until then we will be watching for whether the market can continue this short-term downtrend. Watch for a rise through $64.99 to bring about a bullish view once again.
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