Commodities Brief: Oil capped again below 97.50, precious metals slide

FXstreet.com (Barcelona) - The precious metals markets were unable to follow through after yesterday’s sharp reversal higher, closing the day in the red even as the US Dollar Index was primarily weaker across the board.

After trading as high as 1400, gold suffered declines during much of the European session trading as low as 1360 before finding support and clawing back some losses to close down 1.29% at 1374. At one point silver traded as low as 22.00, before finding support and drifting slightly higher later in the day to close 2.18% at 22.37. Oil, which had been on a four day winning streak, again failed to take out the critical resistance trend line at 97.50 and finished the day down 0.97% at

From a technical perspective, the oil chart continues to remain range bound and needs to take out the 97.50 level (noted above) in order to open the door towards the 99.50 area (200dma). It should be noted the ADX (7) on the weekly oil chart is continuing to display characteristics that support very choppy trading and an extreme lack of trend. The indicator continues to slope sharply downward, and is now sitting at 14.17 (the lowest level since June 2001!). As for gold and silver, short term moving averages remain bearish on both the daily and weekly charts, which may help to influence a ‘sell the rally’ type of mentality. Furthermore, the ADX (7) on both weekly charts is maintaining a sharply upward slope and in the mid 60s, indicating the market is still in a strong trend. Initial resistance on gold sits at 1406 (the 9dma), while support is at 1358 (bullish engulf candle on 1 hour chart). First resistance in silver sits at 23.01 (the 9dma), while support is at 22.00 (bullish engulf candle on 1 hour chart).