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Commodity Brief: Commodities selling off on USD strength

Wednesday was a day centered on the USD, and latest FOMC meeting minutes, in which could be read the committee is ready “to taper or end its purchases before it judged,” or in Kathy Lien words: “this means that Fed officials could end Quantitative Easing way before they reach their 6.5% unemployment target,” the analyst said. This led to a massive buying of USD and USD denominate bonds, making for the biggest rally in USD index in last 3 months, Bloomberg reported.

This also means commodities over all were massively sold off, as Gold closed in NY down -2.54% at $1564, last at $1561, off fresh 7-month lows at $1554, down for fifth consecutive day, while Oil tumbled a -2.31% by NY close, leaving behind a double top pattern at $98, while below neckline at $95, trading last at $94.17, off fresh 1-month lows at $93.70.

“Getting hammered in a take no prisoners sell off, Gold has ended bearish 8 of the last 10 days, with today being the worst daily close from high to low of the year,” says 2ndskiesforex.com founder Chris Capre, adding: “This was following an inverted pin bar which was doubling as an inside bar, along yesterday’s bar which was inside the prior large selling bar,” he explains. “There are only two more stops below at $1550 and $1525 with the latter being the 2012 lows,” Chris concludes.

CRB index, which counts for 19 of most traded commodities, also printed fresh 1-month lows below the key 300 level, though still above current ascending trend line coming from early Nov lows. Copper also lost almost -2% for the day, while iron ore instead, some say because of its lack of speculative trading, stood at fresh 2013 highs at $160. US 10 year bond yields went down from yesterday's highs around 2.05% to lows barely above 2.00% round on save heavens demand.

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