Commodities Brief: Precious Metals consolidate, Oil & Copper tumble

FXstreet.com (Barcelona) - The precious metals complex finished the day mixed as gold closed up (+0.43%) at 1377, while silver (-0.47%) closed slightly lower at 23.26. Volatile trading continued in crude oil wti, which again suffered sharp losses to close down 2.80% at 86.69 which marked the lowest daily close since late June 2012. The copper market also suffered steep losses, closing down 3.9% at 3.17 which marked the lowest daily close since October 2011. The stock market was not able to avoid the “risk off “ mentality either, as both European and US Equities finished the day sharply lower.

Concerns about global growth after recent economic weakness, and strength across the board in the US Dollar which closed up 1.02% at 82.73 have seemed to weigh on weigh heavily on commodities the last few weeks. According to analysts at NAB Global Markets, “Europe reacted to a variety of woes, but concerns about the resilience of global growth is key in the wake of Tuesday’s IMF downgrade”. Furthermore, the Fed Beige Book, added nothing positive,
with 10 of the 12 Fed districts saying growth was moderate or modest said growth had accelerated slightly.

Technically, the longer term time frame (weekly/monthly) charts of gold, silver, crude, and copper have broken down through important support levels and it could be sometime before this type of “technical damage” is repaired. All of hese commodities had been in large consolidation patterns on the weekly/monthly charts for the past few years, and are now below these massive ranges. Often, it is these longer term time frames that dictate price action in the weeks and months ahead.