Commodities Brief: Precious metals plummet as US Dollar adds to previous gains

FXstreet.com (Barcelona) - It was another rough day for the precious metals bulls as gold and silver both finished sharply lower. After shrugging off early weakness, oil actually managed to finish the day in positive territory. The strength in the US Dollar Index most likely didn’t help matters, although the DXY did leak lower later in the afternoon to finish up 16 pips at 83.88 (highest close since early August 2012).

Silver led the declines, closing down 3.46% to finish at 22.54 while gold finished the day down 2.3% to close at 1391. The price action in oil was quite violent, which traded all the way down to 92.13 at one point before retracing all loses and closing the day up 0.26% at 94.39.

From a technical perspective, the daily charts of gold and silver both suffered pretty significant damage today which could be a sign of further losses to come in the next few days. The ‘bear flag’ continuation patterns which had been confirmed earlier in the week have measured move targets that predict much lower prices. In fact, the longer term measured move targets for gold are all the way down at 1200, while silver has targets as low as 18.20.