Commodities Brief: Precious metals decline as US Dollar finds buyers

FXstreet.com (Barcelona) - The precious metals were unable to follow through with any gains today, as strength in the US Dollar appeared to be a catalyst for some of the losses. Gold finished down 1.08% to close at 1457, while silver closed down 0.83% at 23.70. On a final note, oil was once again capped just below the 97 level and finished the day down 0.50% at 96.20.

From a technical perspective, the precious metals appear to be close to determining whether the next major move is higher or lower. Gold has been trapped in a trading range between 1440 and 1480 since late April. Given the sharply downward slope of longer term moving averages on the daily chart/weekly charts (50 and 100dma), it’s hard to argue the path of least resistance is not still lower. Furthermore, the ADX (7) is sharply upward sloping and reads 61.16 (weekly chart) indicating the market is still in a strong trend on a longer time frame basis. A move below 1440 could open the doors 1400.

As for silver, a close below 23.20 would complete the ‘bear flag’ which has been forming the past two weeks and would project a measured move price target down near 18.20. Keep in mind, the longer term moving averages are also bearish for silver, with both the 50 and 100dma’s sloping sharply downward on the daily chart. On a final note, the ADX (7) is sharply upward sloping and reads 65.69 (weekly chart) which indicates the market is still in a strong trend on a longer time basis.