Commodities price are firmer today with base and especially precious metals ending a bad run off losses, while crude oil has extended its gains from the day before when it rallied sharply on the back of the weekly US oil inventories report.
There seems to be no end in sight just yet for silver, which continues to remain beaten down and unloved, and dragging its more illustrious cousin gold down with it.
Whilst gold and silver have a relatively close relationship in terms of associated price action, in the last few weeks these relatively close bedfellows have diverged somewhat, with silver continuing the bearish sentiment initiated in mid April, whilst gold pauses and reflects, with neither metal appearing to benefit greatly from recent weakness in the US dollar (UUP, quote).
At the start of a week full of US earnings, important economic data and a couple of central bank meetings, risk is somewhat off the menu. Equities, copper and, to a lesser degree, oil prices were all trading lower at the time of this writing.
As we highlighted the possibility on Monday, gold took a big plunge below the psychologically-important and support level of $1300 per ounce yesterday. The breakdown triggered further follow-up technical selling, causing gold to fall for a time below $1270 per ounce.
Gold and silver have started the new trading week, month and quarter on the back foot today. At the time of this writing, gold was trading at $1312 and silver was below $19.00 per troy ounce once again.
Yesterday was, once again, another negative day for silver, which continued lower for a fourth consecutive session, opening gapped down from Friday’s close before ending at $19.00 per ounce.
The EURUSD pair fell slightly during the course of the session on Wednesday, as we continue to try to find buyers just below.
Final Trades from last night’s Fast Money on CNBC.
Whilst the spotlight of the metals complex generally focuses on gold whose demise has been relentless, silver too is following the same path lower, and whilst yesterday’s price action for the industrial metal was less dramatic than for gold, the price action this morning has opened up the same technical weakness now self apparent on the daily gold chart.
