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Commodities Brief: Gold & Silver resume the pounding

FXstreet.com (Barcelona) - Following past Wednesday's Goldman Sachs sell call for Gold when was around the $1590 mark and Reuters reporting via IMF sources Cyprus was to sell $400M worth of Gold reserves, later on denied by Cyprus central bank, the precious metal is now a generous $100+ lower, last at $1451 fresh lows, lowest in 2 years. Friday alone, Gold closed down -5% in New York, single day worst decline since Sept 2011. As these lines are written, the precious metal is down -2.2% so far for the session.

Silver in the other hand is also resuming the decline printing fresh 3-year lows below the $25 mark, and extra -4.42% lower for the session/week in Asia-Pacific, while open local share markets trade in the read lead by Nikkei index down -0.89%, and Hong-Kong pointing to a lower open as well. Gold:Silver ratio returned to more normal levels after Friday's massive Gold sell off, closing in NY at 57.20, after touching its highest level above 60 since Sept 2010, above both 50 and 200 day SMA at 55.12 and 54.39 respectively.

West Texas Light Crude Oil also had a nice sell off Friday down almost -3%, its worst single day decline in 4 months, breaking down below its 200 day SMA after finding resistance at its 50 day SMA last at 94.21, printing a fresh 1-month low at $90.27. Although some soft commodities such as Wheat closed higher Friday up +1.97%, or Sugar +1.35%, commodities overall closed lower, with CRB index down -0.94% printing fresh 9-month lows, Copper down -2.64%, Brent -1.28%, etc. Inflation fears have clearly diminished, and even US 10 year note yields went back lower at 1.75%, holding around its 200 day SMA at 1.76%.

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“The euro's upside correction remains intact. A convincing move above the $1.3115-20 area will signal the start of the next leg up that is worth at least another cent and maybe 2”, noted Marc Chandler, Global Head of Currency Strategy at BBH. Additionally he mentioned, “Ideally, the euro holds above the $1.3020 area, but it may require a break of $1.30 to undermine the correction.”
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